This question pertains to help with TurboTax, not accounting issues.
We formed a new company in 2019 and acquired another business. I completed Form 8594, where I recorded the breakdown of assets by class and goodwill impairment, and entered P&L data in TurboTax. However, I cannot figure out:
1. How to enter opening balances, including cash, inventory, etc.
2. How the numbers from Form 8594 flows into Balance sheet.
I will highly appreciate the help and guidance. Again, my questions pertain to how to do it TurboTax, not accounting issues. Thanks in advance.
You'll need to sign in or create an account to connect with an expert.
@Rhyme2096 First of all make sure you change the default "No" for inventory in the business profile section to "Yes" and then start the Cost of Goods Sold section (see screenshots). Your balance sheet will pick up the beginning and ending inventory.
I'm not clear on your statement.
We formed a new company in 2019 and acquired another business.
So did you start a business in 2019, and then that business purchased another business also in 2019? Or are you saying you started a business that you purchased, which was already established prior to your purchasing it?
It also matters what kind of business you started, and if the former, what kind a business you purchased. Sole proprietorship? Single member LLC? (Since you state *WE* purchased/started a business, I doubt its either of those.) Or did you start/purchase a partnership? S-Corp? C-Corp? Something else?
My partner and I formed an LLC (with partnership) because we had almost finalized a deal to buy another ongoing business. So, after forming the LLC, we purchased the business for which I completed Form 8594.
I cannot figure out how to enter opening balances and how the numbers from Form 8594 flow into balance sheet. I have been using Turbotax Business for over 10 years for my other companies...but this is a new and unique situation and TurboTax help is completely silent on these issues.
@Rhyme2096 wrote:I cannot figure out how to enter opening balances and how the numbers from Form 8594 flow into balance sheet.
TurboTax Business, frankly, does not provide a plethora of support with respect to balance sheet entries (or the balance sheet in general). In fact, many of the entries will most likely have to be entered manually, either in the balance sheet section of the program (Federal Taxes tab>>Balance Sheet) or in Forms Mode on Schedule L. Examples would be your beginning cash position, receivables acquired, and any loans from partners.
However, the program should automatically pick up (on the balance sheet) items entered into the appropriate sections of the program, such as beginning and ending inventory, depreciable assets, accumulated depreciation, et al.
The balance sheet in TT Business is generated by inputting the figures from other sources depending on how you maintain your books and records; excel, QuickBooks, etc.
So this is telling me that you have not recorded the purchase of the business on any books and records?
If you have not done so, then you need to do this. This is fairly straight forward if you understand accounting.
You need to look at each class of assets and record those:
Depending on the $$ involved, you may want to consider consulting with a tax professional.
Unfortunately, I couldn't figure out a way to enter opening balances and the ways and I am a veteran TurboTax user. Both your suggested methods, (Federal Taxes tab>>Balance Sheet) or in Forms Mode on Schedule L, do not have option of entering opening balances or the area is grayed out in Schedule L.
So, are you saying I should contact them directly?
I have done the P&L and Balance Sheet in Excel. As I said, I don't need help in accounting issues, I used to be CFO and work as a financial consultant.
The question is: how do I enter opening balances of the balance sheet entries I have created. I have the balance sheet journal entries ready but I cannot figure out how to enter them in the TT.
@Rhyme2096 First of all make sure you change the default "No" for inventory in the business profile section to "Yes" and then start the Cost of Goods Sold section (see screenshots). Your balance sheet will pick up the beginning and ending inventory.
@Rhyme2096 Also, if your numbers are below the threshold for being required to prepare a balance sheet, then you need to check the "No" in the balance sheet section (see screenshot).
@Rhyme2096 wrote:
.....in Forms Mode on Schedule L, do not have option of entering opening balances or the area is grayed out in Schedule L.
The boxes in Schedule L that are grayed out are the same boxes that are grayed out on the actual Form (see screenshot).
Many thanks. This solves my problem of opening balances in Balance Sheet.
I still have questions related to Form 8954 and would appreciate guidance.
1. I have prepared Form 8954 and completed Part I and III to claim goodwill impairment. (I have solid and convincing basis for claiming goodwill impairment). So, the question is: do the numbers from Form 8954 flow into Balance Sheet in TT? I think Form 8954 is supplementary and "explanationatory" to IRS but I'd highly appreciate clarification so that I know how to enter the ending balance for Goodwill.
@Rhyme2096 wrote:
So, the question is: do the numbers from Form 8954 flow into Balance Sheet in TT? I think Form 8954 is supplementary and "explanationatory" to IRS but I'd highly appreciate clarification so that I know how to enter the ending balance for Goodwill.
I apologize if I am being obtuse, but I still fail to comprehend what you mean by "numbers from Form 8954 flow into Balance Sheet in TT". TurboTax Business does not support (or include) Form 8954 (nor does any TurboTax product) so there is no way for the program to pick up anything on that form.
If you need to add (or adjust) the goodwill figures on your balance sheet, you can do that in Forms Mode (on Schedule L) or in the balance sheet section of the program (try Quick Entry mode).
I regret I inadvertently swapped the numbers in the IRS Form. I meant Form 8594, which I had correctly typed in my original post. But you could simply replied by asking if I had the right Form number or to say there was no Form 8954 in TT business.
TT Business does include Form 8594, and I believe it supports it too. While entering the numbers in Form mode, TT Business helpfully informed to enter the numbers in the right part of the Form.
So, my question is: do the numbers from Form 8594 flow into Balance Sheet? Or, should I enter goodwill impairment manually?
I apologize for swapping the form number as well; I should have known better (those two middle numbers are really easy to transpose for some reason).
Regardless, Form 8594 is indeed included in TurboTax Business but it is not supported in Step-by-Step mode in the program; it must be completed in its entirety in Forms Mode (there are actually quite a few forms to which that situation is applicable).
Specifically, with respect to your questions, "........do the numbers from Form 8594 flow into Balance Sheet? Or, should I enter goodwill impairment manually?"
No, the numbers from Form 8594 do not flow into the balance sheet in the 1065 module of TurboTax Business.
Yes, you would enter the goodwill adjustment manually.
Many thanks.
We are all antsy from this Covid-19 virus and need to be extra sensitive.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
huntinad
Level 1
schnelle
New Member
Fuzzy Red Baron
Returning Member
malvinchip
Level 1
Irasaco
Level 2
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.