Another 1120S Corp Question... AAA Account

[miatax]

Client had net income in her 100% owned S Corp for 2008.

She takes salary but she also took out money from her 100% owned S Corp AND she repaid herself back a loan SHE gave to the company in 2007.

I want to be sure I am posting the following items in the right place:

The distribution is reflected on page 4 of the 1120S - line 7 - column A of the AAA account as well as Schedule K - line 16, correct? Most importantly, for 2008, ATX is not letting me have a negative balance at the end of the year for AAA ending balance when it's been done in prior years. Also, my balance sheet is off by that difference that AAA would be negative. What do I do?

Regarding the loan repayment BACK to her, does this affect basis and where is this reported?

[taxxcpa]

Client had net income in her 100% owned S Corp for 2008.

She takes salary but she also took out money from her 100% owned S Corp AND she repaid herself back a loan SHE gave to the company in 2007.

I want to be sure I am posting the following items in the right place:

The distribution is reflected on page 4 of the 1120S - line 7 - column A of the AAA account as well as Schedule K - line 16, correct? Most importantly, for 2008, ATX is not letting me have a negative balance at the end of the year for AAA ending balance when it's been done in prior years. Also, my balance sheet is off by that difference that AAA would be negative. What do I do?

Regarding the loan repayment BACK to her, does this affect basis and where is this reported?

You can't create a negative AAA balance by withdrawing money in excess of basis. It can be negative due to business losses, or timing differences between the books and the tax return but not by excess withdrawals.

[miatax]

Then how do I interpret prior year's M-2 by prior accountant?

AAA ............... S/H undistributed

1) Balance at beginning of year ($24,612) ($2,574)

2) Ordinary income 30,810

3) Other Additions

4) Loss from page 1

5) Other reductions (STMT 7) (5,400)

6) Combine Lines 1 - 5 798

7) Distributions other than div 21,783

8) Balance at end of tax year ($20,985) ($2,574)

[miatax]

Please correct me if I am wrong. The 1120S is on extension and my problem is figuring out her AAA correctly. Her K-1 - line 16 will not affect the 1040, correct?

It's a very simple S Corp which just shows ordinary business income on line 1 of the K-1 which will flow into her 1040. I would like to get her 1040 out today if possible and later deal with my ordeal with the AAA and the balance sheet on the 1120s.

Thank you...