Tax Law (Questions About Taxes)/Excess distributions


Hello Richard,

A client of mine took distributions in excess of his basis and therefore has capital gain income.  Is there a book/tax difference as a result of this and if so, is this an M-1 adjustment. I feel I'm missing something obvious.  He took a $25k distriubution in excess of his basis. My book income is showing $25k less income than tax, am I off on this.

Thank you in advance for clarifying as I'm clear on some of this, but not able to complete the return properly.


jeff. distributions are not run through income. therefore, book = zero. tax = zero. no m1

yes. m2 to reduce 3a, but that is easy to input on whatever software you use. as is picking up the income on the individuals return.

call me if you have any questions.


Tax Law (Questions About Taxes)

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Tax and general business including hospitality related (hotel mgmt degree and experience in industry prior to obtaining ms tax and cpa).


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