Allowing distributions to reduce Accumulated Adjustment Account below zero (1120)

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This topic provides procedures for allowing distributions to reduce the Accumulated Adjustment Account on Form 1120S, Schedule M-2 below zero.

Allowing for all new clients

To allow the Accumulated Adjustment Account on Form 1120S, Schedule M-2 to be reduced below zero for all new clients added to UltraTax CS:

  1. Choose Setup > 1120 Corporation.
  2. In the Federal tab, click the New Client Options button.
  3. In the Return Presentation tab, enter 1 in the Allow distributions to reduce AAA below zero field.

Note: The option you choose applies to all clients subsequently added to UltraTax CS.

Allowing for all existing clients

To allow the Accumulated Adjustment Account on Form 1120S, Schedule M-2 to be reduced below zero for all existing UltraTax CS clients:

  1. In the folders block, click the Balance Sheet folder, and click the Ms tab. Page down to the Schedule M-2 - Analysis of Accumulated and Other Adjustments section on Screen Ms.
  2. Enter 1 in the Allow distributions to reduce AAA below zero field.

Note: The option you choose applies to the current client only.

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