Started LLC in last month of year, Balance sheet won't balance due to prior assets being more than total income for that month, how to deal with assets?

[deytrpr]

I don't believe I have properly entered that as the "capital Reconciliation" in not balanced.  I started llc in last month of the year, and my assets (rental property) out ways the income I received for it.

[PatriciaV]

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[deytrpr]

I was told I couldn't use that for llc etc.

[PatriciaV]

Do you use any accounting software to track your business? The balance sheet from that software might help you enter the info in TurboTax.

[deytrpr]

Yes, I do but I am only doing this for one month as the state has requested, none of the rest applies as I did a 1040 for the other 11 months...

[PatriciaV]

You should have a separate balance sheet for the month the LLC was in existence. If you run a report for just that month, it should give you the numbers you need to enter in TurboTax.

[deytrpr]

My assets were purchased many years prior to the formation of this llc, but are causing an imbalance in turbotax balance sheet.

[PatriciaV]

I'm guessing here, but let's suppose that your assets are worth $5000 and you contributed them to the LLC when it was formed. You've done some business in the one month of going live and have $2000 income less $1000 expenses, for a net income of $1000.
Your balance sheet would be:
Fixed Assets $5000
Owners Equity $6000 (contributed assets plus net income)
Retained Earnings <$1000> (net income)
You may need to try different entries in owners equity to bring the balance sheet into balance.

[deytrpr]

My rental property assets contributed are well over 100,000, we made for the one month of Dec.10,000.  Can the asset be pro-rated into 12 months?

[deytrpr]

Oh, all our expenses have been accounted for in the prior months, insurance, taxes etc.

[PatriciaV]

If you contributed all your assets into the LLC, then the total value should appear on the balance sheet of the LLC. You would not pro-rate assets in any circumstance. If you paid all your expenses prior to moving to the LLC, then the LLC has no expenses for the month of operation. From the numbers you provided, you would have $10K of net income.
Fixed Assets $100,000
Owners Equity $110,000
Retained Earnings <$10,000>
Assets = Liabilities (if you have any) + Owners Equity + Retained Earnings

[deytrpr]

Ok, so that is not an asset contributed to the llc because it was purchased prior to the llc existence?  But, its now an asset to the llc, rather of FIXED ASSET?  This llc is solely for our protection against lawsuits.

[PatriciaV]

Whatever kind of assets you placed in the LLC would go on that side of the balance sheet. Yes, they are now assets of the LLC.

[deytrpr]

And, that would be declared in the balance sheet?  I'm not seeing where to add that.  Sorry, this form is completely foreign to me, way different than 1040!