david3
Level 7

Sole shareholder of S Corp did not take any distributions but contributed cash to the business. The business incurred a loss in 2020.

How does the cash contribution get reported? To Retained Earnings as a negative distribution or to Additional Paid in Capital?

It seems as though APIC would be the correct treatment. Will the shareholder receive basis for the cash recorded as APIC - reported as stock contribution on the Stock and Loan Basis Info Worksheet? Can APIC be reduced for any future distributions once retained earnings are reduced?

Thank you for your help.

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