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boertiii
New Member

1065 Form Depreciate asset effect on Partner Capital

Hello,

 

I am having what I think should be a simple problem to solve. I have a Limited Liability Partnership and I am working on the 1065 form. Because the entity was formed in PA I have to complete a balance Sheet. The issue I am having:

 

When I try balance my Schedule L it is coming up as out of balance. What is strange is it’s out of balance by the exact amount of last years large asset purchase which was 100% depreciated thanks to the jobs act.

 

So my assumption from this is that when you depreciate an asset it comes off of the Partner Capital account. Is this correct, or should it be handled in some other way?

 

Thanks for your help!!!

7 Replies
tagteam
Level 15

1065 Form Depreciate asset effect on Partner Capital

Did you finance the purchase or pay cash? 

hoboXL
New Member

1065 Form Depreciate asset effect on Partner Capital

Paid with Cash

tagteam
Level 15

1065 Form Depreciate asset effect on Partner Capital

Is there a credit (decrease) in your cash account?

hoboXL
New Member

1065 Form Depreciate asset effect on Partner Capital

Yes

tagteam
Level 15

1065 Form Depreciate asset effect on Partner Capital

What about accumulated depreciation? 

hoboXL
New Member

1065 Form Depreciate asset effect on Partner Capital

Yes, it was fully depreciated. 

So, are you saying that depreciating an asset does NOT decrease owners capital or it Does? 

tagteam
Level 15

1065 Form Depreciate asset effect on Partner Capital

What I meant was there is an accumulated depreciation account and that should be credited (decreased).

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