AliciaP1
Expert Alumni

After you file

Distributions are limited to the amount of Equity you have in the business. In your case, your retained earnings from 2020 are the maximum amount you can count as distributions.  The excess distributions need to be reclassified and reduce the "Loan from Shareholder" amount on your balance sheet.

 

Then walk through the questions in the Balance Sheet section of your Federal Taxes and confirm the amounts to clear the imbalance.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post