ytriay87
Level 1

Hello,

This is my first time preparing a balance sheet on Proseries for an 1120 corporation and I could use some help with how to allocate owner distributions and contributions. 

This is a new business and the corporation has a Net Loss of $7,044. the owner contributed $63,630.24 of their personal funds and took a distribution of $40,085.66. I have managed to get the Balance Sheet to balance.

My issue however is that I am not sure I am including the contribution and distribution in the correct boxes. I place the distribution under line 5a of Schedule M-2 and for the contribution I placed it under line 3 of Schedule M-2 which is "other increases" and typed in the line item "Owners Contribution". I find it odd there isn't a specific line item for owner contributions. Is this correct?

Lastly, there is the question on Line 6 of the Schedule K which states as follows:

"During this tax year, did the corporation pay dividends (other than stock dividends and distributions in exchange for stock) in excess of the corporation's current accumulated earnings and profits? See section 301 and 316 - if Yes, file form 5452, Corporate Report of Nondividend Distributions"

However, I see no 5452 form within Proseries and I am not sure if this even applies in my case even though there is a loss.

Any help or guidance on this matter would be greatly appreciated. Thank you!

0 Cheers