S corp capital contribution

Forum|Forum|4 years ago
March 6, 2022
3 replies
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S corp initial year. Owner contributed cash. On 1120s is this common stock or APIC? Technically no par value stock but not sure if putting entire amount on APIC with 0 as common stock seems accurate. Thoughts appreciate💛

Not A Product Question

Mike9241

Level 15

Additional Paid-in Capital Formula = (Issue Price – Par Value) x number of shares issued.

so with no par stock all is APIC

DavidD66

Level 15

If your articles of incorporation provide for the number of shares and the par value, you would allocate that amount to "Common Stock". For example, 100 shares, $1 par - you would allocate $100 to Common Stock, and the rest to Additional Paid in Capital. If your articles are silent, you can allocate it all to Additional Paid in Capital.

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Samsun683Author

Level 2

Awesome thanks. Does this reflect on m2 or do i track basis myself

AliciaP1

Level 13

It depends if you're using tax software or manually completing your returns. Most business tax software, including TurboTax Business, has you enter the information, reports it on M-2, and keeps a Shareholder Basis Calculation Worksheet behind the scenes. If you are preparing your returns manually, you would want to report the info on the M-2 and keep a basis worksheet for yourself.

@Samsun683

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