I have the following questions regarding a single member LLC being taxed as an S Corporation for the first time and would appreciate your assistance.
In terms of Accumulated adjustments account:
1. Should the balance at the beginning of the tax year in this situation be zero?
2. Can the AAA be a negative amount?
3. Is the balance at the end of the tax year on Schedule M-2 for the AAA supposed to equal retained earnings on the balance sheet at the end of the tax year or is this not necessary?
In terms of Accumulated adjustments account:
1. Should the balance at the beginning of the tax year in this situation be zero?
2. Can the AAA be a negative amount?
3. Is the balance at the end of the tax year on Schedule M-2 for the AAA supposed to equal retained earnings on the balance sheet at the end of the tax year or is this not necessary?