Partner capital calculation on balance sheet for multi-member LLC

[lhd463]

My husband and I have a 2-member LLC (in Mass.), each with a 50% interest.  I'm stuck on preparation of the balance sheet (which is required in MA), specifically the calculation of partner capital. We operate on a calendar year, cash basis.  We have a bank account for our LLC.  I thought I could take the 1/1/2019 bank balance, add contributions (e.g., the money each of us made in the operation of the LLC - we're writers/editors), deduct distributions and expenses, and come up with a balance which would be split 50-50.  After having gone through the 1065 portion of TurboTax, I get to the balance sheet section which tells me that both "capital reconciliation" and "balance sheet" are out of balance.  How do I determine partner capital?

[georgelau1]

I believe you need the net income Profit and Loss statement. It's your Gross income MINUS all the deduction, expenses, and tax = net income/loss (NI or NL). Then your NI or NL is added to your equity and that will either increase (NI) or decrease (NL) your Partner capital. 

And then you have your distribution, which should be what you said, a decrease to the partner capital. 

[lhd463]

Thanks for your response.  However, I don't understand how I can calculate the NI or NL, which includes tax, if I can't calculate the tax without the balance sheet being properly reconciled.  It seems to be a circular problem, if you know what I mean. If, in TurboTax, I enter the money the LLC made during 2019 as "service receipts" (on the income page), the balance sheet is way out of whack.  My husband and I both get 1099's from various entities that reflect the payments made to us.  Since these are listed in box 7 of the 1099, the TT instructions say not to enter those amounts in "gross receipts."  This is extremely confusing!

[georgelau1]

Were you able to balance it? So i figure something along the way that might be helpful to you. Your book /bank balance can be very different from your actual balance calculated by TurboTax (TT). You have to reconcile TT balance with your book balance.