How to include capital contributions for LLC taxed as C-Corp without it being income?

[sscf]

Hi, as title says, we have some owner contributions for startup capital for our LLC and electing to be taxed as a C-Corp. Where exactly do we include this, especially because it is causing a large disparity on our balance reconciliation. Or do we also include this on there? Or do we have to pay taxes on it because we are now taxed as a C-Corp? Based on my research capital contributions would not be taxable but its causing this disaprity so not sure. Thank you!

[PatriciaV]

Initial contributions to a corporation in exchange for stock is not a tax event. Instead, the shareholder is now an owner of the corporation. This is recorded on the books of the corporation as an increase in cash (or property) and an equal increase in Stock (Equity). No income statement transaction is recorded.

A C-Corp pays taxes on company profits and shareholders are taxed on dividends received.

Form 1120 US Corporation Income Tax Return can be prepared using TurboTax Business, a desktop application available only for Windows computers. 

[sscf]

Hi Patricia, this was exactly what I was expecting, thank you for confirming. Now I am just left trying to find where to input this on the balance reconcile sheet as turbotax is saying that I need to reconcile the cash balance reported and the reported income on the return. Any advice on where to look next would be helpful, thank you so much for your insightful response.

[PatriciaV]

As mentioned previously, capital contributions increase cash (Line 1) and also Capital Stock/Additional paid-in capital (Line 22 or 23). Be sure you haven't recorded the equity side twice.

Your best option is to prepare the balance sheet in your accounting software, then enter it into TurboTax. Reconciling the balance sheet and supplemental schedules in TurboTax is challenging. You might print Form 1120 p3-6 to see what needs to be revised.