Brokerage accounts and Balance Sheets

[Gregg6]

Hi,

I have a LLC that files as a C corp that holds investments in a brokerage account. The assets this year fall above the $250,000 cut-off for requiring a balance sheet in Turbo Tax Business. My Brokerage account paid out ~$3000 dividends that I need to pay tax on but the stocks that I have not sold have increased this year but I still hold them and shouldn't need to pay capitol gains until I sell them. However, the beginning year and end year difference for the brokerage account difference make is so that my balance sheet does not balance. I am the sole owner of the LLC so I does the balance sheet need to balance for me to file?

How do I account for the discrepancy in my brokerage account in order to balance the sheet?

Thanks

[Rick19744]

The balance sheet is to be reflected based on your internal books and records which will not agree to your tax books and records.

I believe most of the items on the balance sheet are input manually.

Do you have an M-1 for unrealized gains on line 7?  You should and possibly this will fix your issue, but not absolutely positive.

[jc152]

Hi @Gregg6  I'm in the same boat as you. What did you end up doing? Did you take @Rick19744 advice and enter unrealized gain/lost under M1 line 7? In my case it's unrealized lost.  If you can share how you balance your book that'll be great. Thanks!

[BrittanyS]

Unrealized income or losses are recorded in an account called accumulated other comprehensive income, which shows on the owner's equity section of the balance sheet.  This category represents gains and losses from changes in the value of assets or liabilities that have not been sold.  

@jc152 

[jc152]

hi @BrittanyS ,

Where is this account "accumulated other comprehensive income" so I can enter this? What schedule/form is this in? or is this in turbo tax business application? 

[BrittanyS]

The accumulated other comprehensive income is excluded from the net income as gains or losses are yet to be realized.  Instead, it is entered under the equity portion of your balance sheet on the Schedule L form.  You can find this in TurboTax Business by following these steps:

1. Click Federal Taxes from the top navigation
2. Click Balance Sheet
3. Choose to guide me or quick entry
4. Enter Assets
5. Accumulated other comprehensive would be entered under your liabilities and capital section

You will want a balance sheet prepared when entering the information into TurboTax.  The balance sheet should list the following:

Total Assets, liabilities, and shareholder's equity (accumulated other comprehensive income is listed here).  The Liabilities plus the shareholder's equity should equal your total assets.  There will not be a separate entry for the accumulated other comprehensive income as it is a factor in your equity amount.  

@jc152 

[jc152]

Hi @BrittanyS ,

hmm I don't see "Accumulated other comprehensive " in schedule L under liabilities and capital section. I've checked Turbo tax form as well as the raw IRS form. Can you send me a screenshot from your end showing me that line?

[BrittanyS]

From your screenshots, you may need to view the business info section and verify how your business is categorized.  Other comprehensive income is an adjustment to a shareholder's equity account, which occurs for S Corps or C Corps.  You can get to the screen for the shareholder equity adjustment by following these steps:

1. Click Federal Taxes
2. Click Balance Sheet
3. Continue to the Enter your Liabilities and Capital 
4. Scroll Down to Capital and Retained Earnings
5. Enter Other comprehensive income under Adjustments to Shareholders' Equity (Screenshot provided)

@jc152