A few follow-up comments:
- First, hopefully you are preparing a form 1120-S and NOT a form 1065.
- Since you are an S corporation, your balancing account on Schedule L is retained earnings.
- I would also recommend that you meet with a tax professional in your area; see next bullet.
- You indicate that you are paying out "profits as wages as a K-1". The amounts on the K-1 Part III line 1 are not wages (nor are distributions considered wages). Wages paid out are accomplished by issuing a W-2 and those amounts are reflected on the 1120-S page 1 line 7. You also have payroll filing requirements and remittances.
- If you answered "no" to schedule B question 11, then you are not required to complete the balance sheet.
- Finally, I am not sure if you received any professional advice in setting up your structure, but it is extremely rare that a taxpayer would have real estate inside an S corporation. This is not the recommended entity structure.
*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.
