Why doesn't Schedule M-2 line 1 (beginning partner capital) match what I entered on the balance sheet?

[fxf]

When I print out my return for review, my schedule M-2 "Analysis of Partner's Capital Accounts" shows a beginning balance that is about 10% higher than the number that I entered in the "Liabilities and Partner Capital" section of the balance sheet.

How is this being calculated?

I'm pretty sure I need the beginning balance to match what I used for the ending balance on my previous tax return.

[fxf]

Here's some more info:

When I view the Schedule K-1 Worksheets, I can see that one of my partner's "Beginning Capital Account" in section L is not correct -- it is too high. I have only two partners in the LLC, and the first partner's "Beginning Captial Account" is correct.

Any ideas where I would look to verify each member's beginning capital account?

[PatriciaV]

The Partners' Capital beginning balances can be reviewed under Partner/Member information in the Business Info section of the step-by-step process. Using this path for input assures that the info is carried over to all related areas of the return.

These numbers are generally carried over from the prior year return if you used TurboTax Business last year. But you can manually update the numbers presented in this section.

[fxf]

I've gone through everything with a fine-toothed comb, and I think I understand what happened.

I started using TurboTax Business in 2022. I think I may have mis-typed the beginning capital account balance for one of my partners in that year. The incorrect balances were printed on the partner's K-1, and she did not catch this. Nor did I. (Nor did Turbotax -- I believe the member's capital accounts should reconcile to the partnership's capital accounts, but they were out-of-balance on the tax return last year.)

When I started TurboTax Business 2023, the partner's balance was picked up from the previous return.

I do not see where I can correct the member's capital account opening balance. If I go to Business Info -> Partner Info, there is a screen for "Member Capital" but I can only input current year capital contributions/withdrawals. I can not change the opening balance. At least not in the "Step by step" interview.

[fxf]

So it appears as if you can't *ever* modify a partner's opening capital balance after you enter it.

If you've made a mistake and need to correct it, you will need to delete the partner and re-enter all the partner's data. TurboTax should then prompt you for the opening capital account balance, and you can enter the corrected number.

[PatriciaV]

You could also go back to the prior year return and correct your entries so the ending balances are correct. Then transfer the corrected return into this year's TurboTax. (You will lose any work you've already done on this year's return, however.)

If you do this, be sure to use a copy of last year's return and label it so you don't mistake the corrected version for the one you filed with the IRS. 

[Sadiq]

I have a similar propblem.  We are two Members of the LLC and this is the first time I am using Turbo Tax.  It would not let me pull information from Quickbooks.  How do i manually input Opening Balance of the Capitol Account for each Member?

[Sadiq]

No this does not work?

[ThomasM125]

The beginning capital balance should equal the ending balance from the previous year, that should come over automatically if you used TurboTax in the previous year. Line 21 of schedule L, the partner's capital balance on the balance sheet should equal the same amount, as they both come from the Schedule K-1 Worksheet entry. If you click on the line 21 box, a magnifying glass icon will appear to the left of the box and when you click on it, it will take you to the source entry for that line, the schedule K-1 worksheet.

You enter the opening capital account balance on the schedule K-1 worksheet, towards the bottom of that page where it says total beginning of year: