Dear TT,
I use TurboTax but my friend usually goes to a CPA for his LLCs.
Recently he told his CPA that per IRS if the income is less than $250k or if assets are less than 1mil, no balance needs to be reported. Not sure if it's "or" "and" "both"?
The CPA replied that, if you do not want us to show a balance sheet for the LLC, we can pass on it. We highly recommend showing it though since suppressing a balance sheet also suppresses basis for each partner. The IRS and CA have been cracking down on basis reporting over the last two years, so it would be best to report it. We still keep track of these items in the background though.
The question I have is, if per requirement it is not needed then why would IRS and CA be cracking down on basis reporting? As for basis, i don't understand how it get suppressed? all partners equally contribute anyways and own equally the asset, right? So even in TT, they ask and I say no to $250k and 1mil asset and TT says no balance sheet needed.
Thank you.
