I have a client (S Corp) who took distributions in 2017 in excess of the basis. they had $ 85K in retained earnings and $ 500 in capital stock and took $ 102K in distributions. There is only one shareholder and he started the business in 2017. I know that the excess of $ 17K (102-85) is considered a short term capital gain to the shareholder, but how does it get reported on the corporate tax return? His basis cannot be negative and is making my schedule L out of balance.