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AAA balance on Final S Corp Return

elintx
Level 2

Should the AAA balance be $0 in the final return of an S Corp. that was never a C Corp so no E&P to worry about?  Balance sheet is zeroed out at end of 2020.  Distribution of cash and a computer purchased in 2011 that had taken the Sec 179 deduction.  I show a positive AAA balance but should it be $0?  I showed the cash distribution in the AAA but the AAA balance still shows a positive number rather than $0.  Thanks.

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2 Comments 2
sjrcpa
Level 15

Yes it should be zero. When shareholders leave, AAA gets reduced by their proportionate share.


Ex-AllStar
elintx
Level 2

So where do I put the amount as a reduction to AAA in order to get the balance to $0?

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