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Remove Schedule M-2 adjustment

Before you follow these steps, make sure you review the IRS instructions to make sure the adjustment isn’t required.
Do the following to remove the adjustment from Form 1120S, Schedule M-2:
  1. Go to the
    StmtS3
     screen in the
    Review
     folder.
  2. In the
    Sale of Section 179 Assets
     input field, enter
    0
     (zero) to remove the Schedule M-2 adjustment related to the sale of Section 179 assets, or enter the amount you want to report as an adjustment on Schedule M-2.
To remove the adjustment from the calculation of retained earnings, follow these steps:
  1. Go to the
    Ms
     screen in the
    Balance
     sheet folder.
  2. Enter
    X
     in the
    Transfer basis adjustments to REU/Timing Differences
     field. This keeps the adjustment on Schedule M-2 but removes it from the retained earnings calculation. To view the detailed calculation, go to the
    Forms
     view, the
    RE
     folder, then the
    RE
     worksheet.

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