At the beginning of 2024, I switched my business from a sole proprietorship to an LLC with S-corp election. At that point, I transferred my existing business account balance of $21,322 and about $1500 of inventory to my new S-corp. At the end of the year I had $4675 left in the account. So my distributions from my business account to myself as a shareholder are in excess of my net profit, and that's where I'm running into trouble. I thought perhaps that I needed to record the initial $21,322 as shareholder stock basis at the beginning of the year on the schedule K-1, but I don't know if this is correct, and also when I include the starting and ending balances on the schedule L, it comes back with negative retained earnings and a balance sheet that's terribly off. The step-by-step directions haven't helped with this, so I've been trying to make manual adjustments. Does anyone have any advice or experience with this?
