Sergio G. asked

💰  Tax

An S corp officer had $10k in Retained Earnings at the beginning of 2014. The company earned $50k during 2014, the officer took a distribution of $40k, and then contributed $35k to a SEP IRA in 2015, wanting to deduct this from 2014 income. Retained earnings are now negative $15k. Is this acceptable, and can the problem be solved by re-classifying some of the distribution as a loan?

September 14th, 2024

Sandra A. answered

In an S corporation, the concept of 'Retained Earnings' is replaced by 'Accumulated Adjustments Acco...

September 14th, 2024

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