Follow-Up Comments:
- Apparently based on your follow-up response, this is an LLC that elected to be taxed as an S Corp?
- One of your issues is you shouldn't have negative capital stock; assuming you are referring to line 22 on the balance sheet. I do see your comment that you agree with this. Can you not adjust this amount?
- The payroll check issue is a liability and should not impact the capital account.
- If you made no initial investment, as you state, then line 22 should be zero.
- You should then have the loan amounts on line 19.
- Based on what I am reading, somehow figures were entered into the capital account (or transferred incorrectly).
- Just remove the $72,350. What happens then? Is everything all good?
- If you just adjust balance sheet items, and your net income was correct last year and is correct this year, I would make the adjustments and move forward.
- The differential you are noting in your response is not $72,350; it is $71,787 (ending equity)?
- In addition, the differential you are noting in beginning retained earnings is not the $72,350; it is $73,000
- There appears to be more to this than just the $72,350.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
