Let distributions reduce the Accumulated Adjustment Account below 0

Follow these steps to let distributions reduce the Accumulated Adjustment Account (AAA) below 0.

For an existing client

Open the client.

Select the Balance Sheet folder, then the

screen.

Go to the Schedule M-2 - Analysis of Accumulated and Other Adjustments section on the

screen.

Enter 1
in the Allow distributions to reduce AAA below zero
field.

You can let the AAA on Form 1120-S, Schedule M-2 reduce below 0 automatically for any new client you create (doesn't apply to existing clients).

Select Setup
, then 1120 Corporation
.

Select the Federal
tab, then New Client Options
.

Select the Return Presentation
tab and enter 1
in the Allow distributions to reduce AAA below zero
field.