I am assuming you are talking about a Sub-S Corp..... When that happens, I just put the excess as a N/R from the shareholder on the tax return. And make him pay it back in the next tax year. In other words, only make the PTI amount as much as the capital basis can stand...and reflect the overage as a temporary loan...not part of the PTI distributions.
If an answer solves your issue, click on the "Accept as Solution" button! Makes it easier for people to find answers to similar questions that have already been posted.
