Discussion:Shareholder L/R to Retained Earnings?
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Revision as of 19:02, 27 August 2009
Discussion Forum Index --> Advanced Tax Questions --> Shareholder L/R to Retained Earnings?
Discussion Forum Index --> Tax Questions --> Shareholder L/R to Retained Earnings?
| 27 August 2009 | |
| Basic info: C corp set up using Nevada company. One shareholder. 05, 06 and 07 1120's all prepared by different tax preparers - I'm doing 08. I am also preparing the 2006-2008 1040's. SH used corp as his personal account and accumulated $150,000 SH L/R, which was handled by each preparer in different, sometimes bizarre ways. The IRS is meeting with this taxpayer regarding a significant amount of unpaid payroll taxes and provided account transcripts for the 941's and for the 05 and 06 1120's. From what I can tell, IRS has closed 05 and 06 corporate as no balance is due for either year. However, I have no idea about 2007, which is the main issue here. The preparer of 2007 1120 (the NV company that set this up) made an AJE to 'move L/R to available retained earnings', which actually created a negative RE of over $60,000. We now have over $70,000 of reclassified L/R, which to me is nothing but 'disguised' dividends and another $40,000 actually shown as dividends on M-2. Why would this AJE have been made (or is it simply that so many other things were done improperly as well on that return)? | |
