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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16547
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Partnership A made a distribution in excess of basis to its

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Partnership A made a distribution in excess of basis to its Owner S Corporation A. I know to report this on the 1120S on Sch D, however what is the entry to record the gain on the books of S Corporation A? So far I debited cash and credited the Investment Partnership A.

MyVirtualCPA : Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.
MyVirtualCPA : How are you today?
MyVirtualCPA : Why would you debit cash if you made a payment? You will need to debit the investment account (debits reduce investment, and when you pay out it is reduced) and credit cash
Customer: I am asking about recording the receipt and gain on S Corporation A's books who received the distribution in excess of basis from Partnership A that S Corporation A owns.
Customer: Owns 50% of
MyVirtualCPA : Then you are correct, debit cash credit investment and credit gain on investment for any balance in excess of the basis
Customer: Thanks for getting me unstuck. So obvious, but I was totally missing it.
MyVirtualCPA : You're welcome
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