Schedule M-2 requirements for S Corporations

Schedule M-2 is required even if the corporation was always an S Corporation. S Corporations with accumulated E and P must maintain the AAA (Accumulated Adjustment Account). The AAA helps determine the tax effect of the S Corporation's distributions. If you are an S Corporation that doesn't have accumulated E and P, you don't need to maintain the AAA. However, the IRS recommends that all S Corporations maintain the AAA.  If you don't want to print Schedule M-2, go to the Balance Sheet folder in the
Ms
screen in and mark the
Suppress printing of Schedule M-2
field.
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