Order used when S Corp makes a distribution
When there's an amount entered in the
Distributions
field in the Accumulated Adjustments Account
column in the Ms
screen and the Allow distributions to reduce AAA below zero
field is blank or equals 2
, UltraTax CS reduces the following retained earnings accounts.- Accumulated Adjustments Account (AAA) to the extent the distribution doesn't reduce the account below zero.
- Any remaining distribution will then reduce the Undistributed Previously Taxed Income (PTI) account.
- If the distribution reduces PTI to zero, any remaining distribution will reduce the Accumulated Earnings and Profits account (AE&P).
- If the distribution reduces AE&P to zero, any remaining distribution will reduce the Other Adjustment Account (OAA).
- Any remaining distribution reduces the Retained Earnings Timing Differences (REU) account.
The REU account in UltraTax CS represents the accumulation of S Corporation book/tax timing differences, if applicable.
Nondividend distributions can't reduce AE&P. Distributions from AE&P are treated as dividends to the shareholder. Enter distributions from AE&P in the
Distributions
field in the Ms
screen, Accumulated E&P
column.
