For previous years' taxes, my LLC hasn't had to file a schedule L. However this year I do. When TurboTax imported from Quickbooks, it got all the end of year balance sheet numbers for the schedule L, but it didn't fill out any of the beginning of the year numbers. So now TurboTax complains my balance sheet is out of balance.
I'm trying to manually enter the beginning of the year numbers in schedule L and M-2, but I don't know what to enter. Specifically, I have a draw account and it put the total amount of this account for the 10 years of the business under schedule M-2, line 7. I've tried adjusting this to just have this years' draws and put the beginning of year draw account balance in schedule L, line 21. But this seems to show out of balance on the "Balance sheet out of balance by" line. Also I put the correct beginning of the year cash balance in schedule L, line 1 (the end of year was correctly imported from Quickbooks), but the out of balance line seems to be off by these amounts too. If everything is in balance, should the "Balance sheet out of balance by" line be 0?
Thanks.
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If you are talking about the balance sheet for a partnership return the amount for line 21 is the amount of equity each partner has, not the amount of draws taken. After the year is completed the amount of draws taken during the year reduce the amount of equity in the partner's capital accounts.
For the M-2 any draws taken should only be the amount taken during 2019 not any previous year.
The assets on the balance sheet and the liabilities need to be equal and then your balance sheet balances.
Line 14 and Line 22 need to be the same amount for the Balance Sheet to be in Balance.
Thank you for the response. I think I've made some of the corrections I've needed to make. I've gotten the balance sheet balanced now, but I still have a couple questions to make sure I've done it correctly.
Our situation is pretty simple. The company earned money and most of that has been paid to the partners. But we still have a little cash left in the business bank accounts. The beginning and end of the year bank account balances are reflected in the Cash (line 1) of schedule L.
The complication comes in because we bought a small amount of equipment that is treated as depreciable assets. So the remaining depreciable amount is shown on line 9b in columns b and d. This gets added to the cash amount to give the result for Total assets in line 14.
To get the balance sheet to balance, I needed to copy the total assets amount from line 14, column b to line 21, column b. Is this correct? Should the partners' capital account total be the cash in the bank plus remaining depreciation? We don't have any other assets. Any other income has already been paid to the partners.
Hopefully I explained this a little better this time. Thanks for the help.
"I needed to copy the total assets amount from line 14, column b to line 21, column b."
No, you should not need to do this to balance. You need to figure out what is missing -- either an asset or liability that is not accounted for. Sometimes overriding the Net Income (loss) per Books will be helpful with your own calculation will be helpful as it is unclear how TurboTax arrives at this number on the "Reconciliation" form.
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