I have a similar problem, which could be resolved by using the M-1 adjustment, but I question if doing so is the best way to solve the problem. I am using turbo tax for business and preparing a form 1120 return as a C – corp. This is my first year to use turbo tax for business, so I have manually entered in the Beginning balances requested. For the form 1125-A, I provided accurate Beginning Inventory ($1489) and Ending Inventory ($10,698) balances which reflect an increase in inventory of $9202 from beginning of year to end of year. When reconciling Book Income/loss against my Balance sheet and Retained earnings the numbers are in Balance. However for Income reconciliation the Book income/loss (in this case a loss of -$82107) is off from the Turbo income loss (-$72898). That difference in the Book versus Turbo is $9202, which is exactly the same value of the Increase in inventory beg balance and ending balance ($9202). I can’t figure out why. The COGS 1125-A seems to be filled on correctly, and if I compare the Form 1120 year to year Balance Sheet in Schedule L return, everything balances and represents my Books accurately. Your thoughts?
