You should never take distributions in excess of basis.  And you (or your CPA) should be tracking basis carefully.

Generally if a shareholder takes dist in excess, I will reclassify the excess distribution as a loan to shareholder.  Then the following year instruct the client to take no distributions until income is sufficent to cover that (so that it goes away on the following tax return).  Note that this technique would probably be overturned if IRS audits you, but I've only had one case where that ever happened - and it was egregious and happened multiple years in a row, which alerted them.  You have to decide if you accept that risk.

Also, distributions NEVER "zero out."  Basis and distributions are a cumulative ever-to-date amount.

If you are looking to track just your current year, you can set up a "prior distributions" account, and every Jan 1 transfer your prior dist over there.

Mark Wagner CPA