However, I'm seeing now on our Schedule M-2, Line G, that we have a significant "Distributions in excess of Retained Earnings". Will this raise a red flag? If this is unusual and could trigger an audit, then perhaps we didn't carry over retained earnings properly in past years (last year we transitioned from LLC to S-Corp, and RE may not have properly carried over).
Also, I'm surprised that line C equals line F, even though the ending balance should probably be negative since our distributions this year exceed the beginning Retained Earnings plus the Net Income...
Thanks.
