We have a two-member LLC (husband and wife) taxed as a partnership and filing Form 1065 for several years. Finally this year we have the fortunate problem of having generated revenue sufficient that we are now required to complete Schedules L, M-1and M-2. Yet what a problem!
I got most of the way through simply using the equity balances from our balance sheet. Schedule M-1 reconciles, after making needed adjustments for specific cash-basis expenses. And Schedule L would reconcile, except on line 21, Partner's capital accounts ending balance, it presumes to take the amount generated from Schedule M-2, line 9. The problem is that there is something in Schedule M-2 that makes the capital accounts ending balance disagree with the equity amounts in our books by $7k. (Though the IRS instructions are clear that beginning capital account balances on Schedule M-2 do not need to reconcile with Schedule L if it isn't reported on a tax basis, I'm loathe to overwrite TurboTax except as a last resort.)
Previously, we've not had any tax or business need to track our capital accounts. We've never made any capital contributions (neither cash nor property), we've generated revenue each year, the partnership has no property, and distributions are made only in cash. Now that we need to report them, I'm not finding any resources in TurboTax to help.
Is there anything in TurboTax to help calculate and track partners' capital accounts?
