Business & farm

You might not have to complete Schedule L.

The IRS does not require you to complete Schedule L (balance sheet), Schedule M-1 (reconciliation of book income with return income), and Schedule M-2 (changes to partners' capital accounts) if this partnership has:

• less than $250,000 in total receipts
• less than $1,000,000 end-of-year assets, and
• provides Schedules K-1 to its partners.

If you need (or want) to prepare Schedule L, you can indicate zero assets at the beginning of the tax year, you can make the entries manually in Forms Mode.  Please follow these steps:

1. Go into Forms Mode by clicking on the Forms icon in the top right of the blue bar.  [Screenshot #1]
2. In the Forms in My Return list on the left, click on Form 1065 p4-5.   [Screenshot #2]
3. Scroll down to Schedule L - Balance Sheets per Books.
4. Make you changes on the appropriate lines.
5. To return to the interview, click on the Step-By-Step icon in the top right of the blue bar.  [Screenshot #3]