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Sure. I'm filing a final tax return for an Scorp with a

Sure. I'm filing a...

Sure. I'm filing a final tax return for an Scorp with a negative SCH M-2 or AAA... There were no distributions taken out ever, The Scorp was not profitable. The Shareholders' have paid in capital with cash no property. The negative R/E is equal to the paid in capital. Can I input the shareholders' capital on line 3 other additions to zero out the AAA.

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3/16/2018
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,005
Experience: 35 years tax experience, including four years at a Big 4 firm.
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I would not zero out AAA. A final return should have the liquidation distribution information presented, so that both IRS and the shareholders can address the gain or loss on liquidation and its character. The remaining issue of shareholder gain or loss can then be reconciled to the final 1120s reporting.

I suggest leaving the capital and AAA accounts alone, as this will be addressed on shareholder 1040s.

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PDtax
PDtax, Certified Public Accountant (CPA)
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Experience: 35 years tax experience, including four years at a Big 4 firm.
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