I have a very small partnership business and our $2000 security deposit was always listed correctly on Schedule L item 6 as “Other current assets”. A few years ago we moved locations and eventually got the security deposit returned. Unfortunately, our inexperienced bookkeeper at that time recorded this as income and then deleted the deposit entry and it was never noticed until now which is 5 years later. Our QuickBooks records have always stayed balanced every year. Unfortunately since that time, Schedule L on our Form 1065 only balances with a negative (-$2000) in item 6 “Other current assets”. It doesn’t seem to affect the taxes but I’d really like not to carry this ridiculous number every year even if TurboTax accepts it. I don’t want to go back 5 years to change our balanced books or to amend our tax returns for the little extra tax that we paid but I can’t figure out how to get rid of it in the Balance sheet section of schedule L since it has to be consistent with each prior year.
Is there anyway to get rid of this value for next year even if it means paying additional taxes on that amount?
