Retained Earnings are reported on Line 24, Columns (b) & (d) of Schedule L. The ending Retained Earnings amount is pulled from Schedule M-2 – Analysis of Accumulated Adjustments Account, Other Adjustments Account, and Shareholders' Undistributed Taxable Income Previously Taxed.
In the M-2 section of your return, you will enter the Distributions as indicated below:
- Enter any Other reductions to be included on Schedule M-2, Line 5.
- Enter the Amount of Other Reductions to carry to Schedule L.
- Amounts entered in Other reductions don't automatically flow to the calculation for retained earnings; enter the amount here to include it in the balance sheet calculation.
- Enter an amount in Distributions other than dividends [O] to reduce the AAA if distributions from AAA are different from the amount entered in Property Distribution
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