ProSeries does not handle this situation well. I used PrSystem FX at my previous firm and that software would do a reconciliation between AAA and RE that automatically handled distributions in excess of AAA (not in excess of basis). The following year if you had an increase in AAA, it would automatically decrease the timing difference. I've been overriding the distributions on the M-2/Retained Earnings worksheet in ProSeries for years, both in the years that the distributions exceed AAA and again in the years when net income exceeds current distributions to reverse the timing difference.