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Level 1
January 31, 2022

Distributions in Excess of AAA

  • January 31, 2022
  • 1 reply
  • 2 views

I am working an amendment for a client, but I am stuck on this one thing. This client has always been an S Corp so there is no AEP.  I know distributions cannot take AAA negative, but losses can. I am trying to tie retained earning to AAA. I know the difference is the distributions that could not take AAA negative. Is this a permanent difference?

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    1 reply

    sjrcpa
    Level 15
    January 31, 2022

    Yes.

    The more I know the more I don’t know.