Make the election for a deemed dividend
UltraTax CS automatically prints the election to distribute a deemed dividend when you enter an amount in the
Deemed dividend elected under Regulation 1.1368-1(f)(3)
field on the Ms
screen in the Balance Sheet folder. This election isn't a traditional election statement since you can't view or edit it, and you don't select it on the Elect
screen.UltraTax CS treats the amount entered in the
Deemed dividend elected under Regulation 1.1368-1(f)(3)
field as a distribution paid from accumulated E&P and reduces the Accumulated Earnings and Profits (AE&E) account. The Additional Paid-in Capital account at the end of the year is increased by the same amount, as well as the shareholder's stock basis in the S Corporation.
