Discussion:RECONCILING BOOK / TAX INCOME-1120S

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(Your honorable A)
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(The OP did title)
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 +{{ForumReplyPost|UserID=Captcook|Date=15 October 2009|Text=The OP did title this thread "RECONCILING BOOK / TAX INCOME-1120S", so it would stand to reason their books are not on a tax basis. GAAP is a reasonable assumption to make. Excellent point raised, UT. }}

Revision as of 04:47, 15 October 2009

Discussion Forum Index --> Advanced Tax Questions --> RECONCILING BOOK / TAX INCOME-1120S
Discussion Forum Index --> Tax Questions --> RECONCILING BOOK / TAX INCOME-1120S

PM1040 (talk|edits) said:

13 October 2009
MY CLIENT RECEIVED A K-1 (#1065) AND I ENTERED THE LOSS OF $(24) ON PAGE 1 LNE 5 OF #1120S...BUT WHERE DO I MAKE THE ENTRY TO BALANCE MY BOOK LOSS WITH TAX RETURN LOSS FOR THE $(24)

I HAVE TRIED TO ENTER $(24) ON SCH M-1 BUT I WILL HAVE TO MANUALLY OVERRIDE THE SOFTWARE (PROSERIES-INTUIT) ....WHERE DO I PUT THE $(24) SO I CAN FINISH THIS TAX RETURN TODAY????

THANKS FOR YOUR HELP

Kevinh5 (talk|edits) said:

13 October 2009
investment in partnership/LLC (we tax people sometimes call this 'basis')

KathiJud (talk|edits) said:

13 October 2009
Thinking of the balance sheet - shouldn't the $24 loss reduce your Investment in this entity asset account? Do you not normally record this on the corp's books?

If you make this entry and adjust your book P&L for real so there is no M-1 adjustment.

Southparkcpa (talk|edits) said:

13 October 2009
The journal entry on the s corp books (isn't it late?) is as follows:

It follows the "Equity method of accounting"

Credit Invest in partnership (asset account)

Debit loss on Investment (P and L account)

Blrgcpa (talk|edits) said:

13 October 2009
I agree with southpark. There's no need to shout at us.

UTdave1 (talk|edits) said:

14 October 2009
That would be the entry if you followed equity method. It could be that if you have <20% interest and no influence on the entity that you follow cost method as opposed to equity method and have no entry. Then you would have a difference in the investment account for book/tax purposes.

AmirK (talk|edits) said:

14 October 2009
UT, I honestly do not think a corporation with a schedule K-1 showing a massive loss of $24 :) is neceesarily on GAAP basis; do you? The SouthParkCPA response stands.

Southparkcpa (talk|edits) said:

14 October 2009
Your honorable Amirk....

Thank you and I appreciate not being over ruled.

Check your robe, I put the bribe money in your left pocket. (lol)


I got a kick out of your support! Thanks!

Captcook (talk|edits) said:

15 October 2009
The OP did title this thread "RECONCILING BOOK / TAX INCOME-1120S", so it would stand to reason their books are not on a tax basis. GAAP is a reasonable assumption to make. Excellent point raised, UT.
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