S Corp Shareholder distributions

Forum|Forum|6 years ago
February 5, 2020
3 replies
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I took a shareholder distribution during 2019. In the shareholder section of Turbotax, I entered the amount distributed, however in the balance sheet section it doesn't show up and there doesn't seem to be a way to correct it. That is throwing my retained earnings off. How do I fix it?

TurboTax Business Windows

Anonymous_

Employee

With TurboTax Business, you typically have to use the Balance Sheet section to manually adjust your retained earnings and cash accounts when distributions are made.

cmeier

I have the exact same question as asked above - your answer did not solve it. Why do distributions in the retained earnings section not match what i entered in the shareholder distributions?

Anonymous_

Employee

@cmeier wrote:

Why do distributions in the retained earnings section not match what i entered in the shareholder distributions?

What, exactly, is the problem? The distributions should reduce that account (RE). Is that not happening?

Jennybum315

Same basic question above, but I am second guessing myself so would like to clarify...

When I enter my owner distribution amount of $208,849 in the Distributions to Shareholder section, it causes Turbo Tax's calculation of my retained earnings in the balance sheet section to be short by the amount of my owner distribution ( thereby not matching my accounting software balance sheet).

When I remove the entry from the Distributions to Shareholder section, everything balances perfectly. However this feels incorrect to me because there truly was an owner distribution of $208,849.

It seems to me that I'm paying taxes on the amount either way, so maybe I am over thinking it, but this is my first year as an S-corp to wanting to make sure i'm starting out correctly. Any response on this would be greatly appreciated! Thanks!

PatriciaV

Employee

@Jennybum315

As Rick19744 previously posted, you will need to enter your actual balance sheet information (from your accounting software) into TurboTax.

You can do this using the "Balance Sheet" topic from main menu, or go to Forms and manually enter the correct numbers on Form 1120S p3-5, Schedule L. Note that any adjustments to Retained Earnings are entered on the Schedule M-2 Smart Worksheet farther down on page 5.

Change only numbers in fields/boxes that are blue. Right click other numbers and choose Data Source. If necessary, go to the source form to make your changes. Otherwise, you may see a red checkmark beside a form, which could prevent you from e-filing your return.

Finally, if you are not confident completing your business return yourself, you may benefit from the assistance of a local tax expert who is more familiar with your complete tax situation.

Additional info: What is Forms Mode?

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ncf317

Hi,

I'm reopening this as I think there's a bug within the software. I believe I see the same thing.

When you begin the step by step, the screen asks you to enter in your shareholder distribution. When you get to the retained earnings reconciliation - this amount is not included and therefore your calculations are off. It appears to be a bug within the software.

The software specifically asks for your distribution. But when you get to the screen to see it there, it's not there in the calculation.

This is not an accounting issue. The screen literally has 0. And the amount I'm off - is the amount I distributed to myself as an SD.

Was there ever a fix for this? Right now my RE is off so I can't carry forward the information.

cnguyen829

I'm also having the same issue. My ending RE is incorrect because the shareholder distribution number is showing as zero. Was there ever a fix for this or do I truly have to adjust everything manually?

HopeS

Retained Earnings are reported on Line 24, Columns (b) & (d) of Schedule L. The ending Retained Earnings amount is pulled from Schedule M-2 – Analysis of Accumulated Adjustments Account, Other Adjustments Account, and Shareholders' Undistributed Taxable Income Previously Taxed.

In the M-2 section of your return, you will enter the Distributions as indicated below:

Enter any Other reductions to be included on Schedule M-2, Line 5.
Enter the Amount of Other Reductions to carry to Schedule L.
- Amounts entered in Other reductions don't automatically flow to the calculation for retained earnings; enter the amount here to include it in the balance sheet calculation.
Enter an amount in Distributions other than dividends [O] to reduce the AAA if distributions from AAA are different from the amount entered in Property Distribution

@cnguyen829

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