Remove Schedule M-2 adjustment
Before you follow these steps, make sure you review the IRS instructions to make sure the adjustment isn’t required.
Do the following to remove the adjustment from Form 1120S, Schedule M-2:
- Go to theStmtS3screen in theReviewfolder.
- In theSale of Section 179 Assetsinput field, enter0(zero) to remove the Schedule M-2 adjustment related to the sale of Section 179 assets, or enter the amount you want to report as an adjustment on Schedule M-2.
To remove the adjustment from the calculation of retained earnings, follow these steps:
- Go to theMsscreen in theBalancesheet folder.
- EnterXin theTransfer basis adjustments to REU/Timing Differencesfield. This keeps the adjustment on Schedule M-2 but removes it from the retained earnings calculation. To view the detailed calculation, go to theFormsview, theREfolder, then theREworksheet.
