Where to Enter Shareholder Distributions in UltraTax CS
Distributions appear per shareholder in the Shareholder Information window, alongside each shareholder pro rata share and stock basis, reached from View then Shareholder Information. If distributions were not made pro rata, they are forced on the Federal Other Info tab of that window, and if one shareholder is forced there, all of them have to be.
- View
- Shareholder Information
- Federal Other Info tab
| Trial balance account | UltraTax CS screen and field | Lands on |
|---|---|---|
| Distributions per shareholder | Shareholder Information window spreadsheet | Schedule K line 16d and K-1 box 16 code D |
| Non pro rata distributions | Federal Other Info tab, forced for all shareholders | Each K-1 |
| Allow distributions to reduce AAA below zero | Screen Ms, off by default | Schedule M-2 |
| Deemed dividend election | Screen Ms, Regulation 1.1368-1(f)(3) field | Treated as paid from accumulated E&P |
| Owner pay miscoded to expense | Not a deduction. Move it to distributions | Nowhere on page 1 |
| Basis effect | Shareholder Basis dialog | Form 7203 on the shareholder return |
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Try it freeWhere to Enter Shareholder Distributions in UltraTax CS on a trial balance
| Acct # | Account | Debit | Credit |
|---|---|---|---|
| 1000 | Cash | 42,800.00 | |
| 1200 | Accounts receivable | 68,500.00 | |
| 1300 | Inventory | 55,000.00 | |
| 1500 | Equipment | 145,000.00 | |
| 1510 | Accumulated depreciation | 47,500.00 | |
| 2000 | Accounts payable | 28,400.00 | |
| 2100 | Accrued expenses | 9,200.00 | |
| 2400 | Notes payable | 92,000.00 | |
| 2450 | Due to shareholder | 15,000.00 | |
| 3000 | Common stock | 10,000.00 | |
| 3900 | Retained earnings | 86,300.00 | |
| 3950 | Shareholder distributions (the account this page is about) | 52,000.00 | |
| 4000 | Gross receipts | 612,000.00 | |
| 5000 | Cost of goods sold | 318,000.00 | |
| 6000 | Salaries and wages | 88,000.00 | |
| 6050 | Officer compensation | 72,000.00 | |
| 6300 | Depreciation expense | 21,500.00 | |
| 6900 | Other operating expenses | 37,600.00 | |
| Total | 900,400.00 | 900,400.00 |
Example journal entries
| Account | Debit | Credit |
|---|---|---|
| Shareholder distributions | 52,000.00 | |
| Cash | 52,000.00 |
| Account | Debit | Credit |
|---|---|---|
| Shareholder distributions | 6,400.00 | |
| Other operating expenses | 6,400.00 |
The shareholder window, not just a screen
The Shareholder Information window shows each shareholder's distributions next to their pro rata share and stock basis, which is a sensible place for it: those three figures belong together. Open it from View, then Shareholder Information.
That is also where a non pro rata distribution is handled, on the Federal Other Info tab, with one rule attached: if any shareholder's distributions are forced there, all shareholders have to be forced there too.
Partial forcing is the error this rule exists to prevent. Forcing one shareholder and leaving the rest to compute produces K-1s that do not foot to Schedule K.
Non pro rata is a question first
S corporation distributions are supposed to follow ownership. Disproportionate distributions threaten the single class of stock requirement, which is a larger problem than the tax on the distribution itself.
So before forcing the allocation, establish what happened. A payment to one shareholder that was really a loan, or compensation, or a timing difference that reverses in January, each has a different answer, and only one of them is a forced distribution.
Two Screen Ms settings worth knowing
Allow distributions to reduce the accumulated adjustments account below zero. Off by default. The default is the conservative treatment, and turning it on changes how the M-2 presents a distribution that exceeds AAA.
The deemed dividend election under Regulation 1.1368-1(f)(3). An amount entered in that field on Screen Ms is treated as a distribution paid from accumulated earnings and profits. That matters for a former C corporation with E&P still on the books, where the ordering of distributions has real tax consequences for the shareholders.
What the balance sheet has to say
Distributions reduce equity, so the trial balance should show them in their own account, not inside retained earnings and certainly not in an expense account.
A distribution coded to officer compensation or consulting fees understates taxable income by the full amount, and it is the most common equity error in small business books. The reclassification is a conversation with the client, because on an S corporation the two options, distribution or compensation, have very different payroll tax outcomes.
Tax return treatment
| Form | Line |
|---|---|
| Form 1120S | Schedule K line 16d, Schedule M-2 from Screen Ms, K-1 box 16 code D |
| Form 7203 | Where the shareholder tests the distribution against basis |
Common questions
Where do I enter shareholder distributions in UltraTax CS?
Per shareholder in the Shareholder Information window, opened from View then Shareholder Information, where distributions sit alongside each shareholder pro rata share and stock basis.
How do I enter distributions that were not pro rata?
Force them on the Federal Other Info tab of the Shareholder Information window. If any shareholder is forced there, all shareholders have to be forced too, otherwise the K-1s will not foot to Schedule K.
Can distributions reduce the accumulated adjustments account below zero?
Only if you allow it. Screen Ms has a field for that and it is off by default. Leaving it off is the conservative presentation; turning it on changes how a distribution exceeding AAA appears on Schedule M-2.
What is the deemed dividend field on Screen Ms?
An amount entered in the Regulation 1.1368-1(f)(3) field is treated as a distribution paid from accumulated earnings and profits. It matters for a former C corporation that still has E&P, where the ordering of distributions changes the shareholder tax outcome.
Related answers
Go deeper
This page is the short answer. These articles work through the same ground in detail.
Last reviewed October 18, 2026.