In general, the distributions reflected on this line will agree to the total of all shareholder K-1 distributions.
However, the AAA column which tracks income and losses passed out to shareholder's, cannot go negative as a result of distributions. So if this happens, distributions reflected on Sch M-2 line 7 will not agree to the total of the combined distributions reflected on the K-1's.
A simple example: let's say Sch M-2 is $1,000 and there were $1,500 in total distributions to the shareholder's (which the prorata distribution is reflected on the respective K-1). Line 7 of Sch M-2 will only show $1,000; since the AAA cannot go negative or more negative as a result of distributions.
If Sch M-2 line 6 was a negative $1,000 and there were $1,500 in total distributions to the shareholder's, then line 7 will be blank; as the AAA cannot go negative or more negative as a result of distributions.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
