Schedule M-2 of 1120S


C

c111

1. Is "Ordinary Income" on line 21 of 1120S considered
"previously taxed income" on Schedule M-2? And, what
exactly is previously taxed income?

2. Would line 1 of the AAA of Schedule M-2 equal line 24
"beginning retained earnings" of Schedule L? Seems these
would be different since one is books and the other is tax.

Please help.

Thanks
Charlie
 
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C

Charles L DiSalvo

c111 said:
1. Is "Ordinary Income" on line 21 of 1120S considered
"previously taxed income" on Schedule M-2?
No.

And, what exactly is previously taxed income?
Income of an S Corp prior to 1982.
2. Would line 1 of the AAA of Schedule M-2 equal line 24
"beginning retained earnings" of Schedule L?
Not necessarily
Seems these would be different since one is books
and the other is tax.
Correct. Some of the differences between AAA and retained
earnings included Tax to book timing/temporary differences
such as depreciation. previously taxed income. C Corp
earnings and profits.

Charles DiSalvo, CPA
 

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