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How do I input imputed interest on an 1120S

Level 1

I entered it as an M-1 timing difference, but it is throwing retained earnings off.

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2 Replies 2
Level 12

I think you need more details. Imputed interest for a Cash Basis entity? Owed TO the S Corp? Owed BY the S Corp? Owed to/from a shareholder, a lending institution? The proceeds of the borrowing were used for what? Secured by?

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Level 1

It is imputed interest expense on a loan from a shareholder.  I entered it as an M-1 timing difference because I didn't find a way to input it as a permanent difference.  After asking the question, I saw I neglected to also increase interest expense by the same amount.  Increasing interest expense fixed the retained earnings issue, except that I had to override to make it a AAA item instead of a timing difference on the Schedule M-2/Retained Earnings Worksheet.

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