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S-Corp draw account

RueW
Level 1

We own a country inn.  For over 20 years, I've used an Equity 'draw' account to keep track of cash paid in and paid out of our S-corp.  (We handle very little cash--almost all credit card receipts.)  We also have a sister LLC, which owns our land and buildings, which does not maintain a checking account, so we've paid tax bills, etc. from the main S-corp account through a draw, and we record a rent payment there, as well.  Historically, I've shown the balance of the draw accounts as a distribution at the end of the year, and have closed them to Retained Earnings on 1/1 of the next year.  However, for the past few years, our distributions have gone negative.  Up until this year, I've been able to show a negative distribution on our tax return, and all has been well.  This year, ProSeries isn't allowing me to show a negative distribution.  How should I handle this?  

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abctax55
Level 15

Hi there,

You’ve come to an Intuit site supporting tax professionals, and you may be looking for support as an individual taxpayer. Please visit the TurboTax Help site for support.

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Former Chump..umm... AllStar...This message was typed from 6 feet away so you can safely read it immediately.

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RueW
Level 1

I am a tax professional (mostly retired).  Not looking for Turbo Tax help, but professional tax advice.

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BobKamman
Level 13

We are tax professionals, not country-inn-owner professionals.  Good luck with that.  

RueW
Level 1

Sorry!  My original question apparently delved a little too deeply into my personal problem.  My Tax Question is: has there been a change in tax law that now will not allow a negative distribution to be entered on the M-2 Schedule, line 7?  And if so, does ProSeries have any instruction on the matter?

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