Discussion:AAA distributions

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Discussion Forum Index --> Tax Questions --> AAA distributions

NJtaxman (talk|edits) said:

18 June 2007
I have an S-Corp with a negative AAA account at the end of the year, but have stock and APIC to cover the negative. Can I still do a distribution for the difference as a return of capital?

Lacerte will allow, but gives a critical diagnostic.

Kevinh5 (talk|edits) said:

18 June 2007
no, not unless the shareholder is redeeming his stock

Riley2 (talk|edits) said:

19 June 2007
Check the shareholder's basis in his stock. If the distribution exceeds the basis in his stock, the difference will be taxed as sale of his stock.

Mtmckeecpa (talk|edits) said:

19 June 2007
NJ,

I use Proseries but Lacerte should have a "shareholder basis worksheet" activate that and see whether or not the distributions are taxable.

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