topic Re: Balance sheet issue in Get your taxes done using TurboTax

Balance sheet issue

LillianRose — Tue, 10 Feb 2026 11:20:15 GMT

My husband is having to file a balance sheet with his 1120S for the first time this year, because the assets are more than 250K. The only entries on the assets are depreciable bldgs (minus depreciation). How does he offset this in liabilities? TT has entered only his income for the year as Retained earnings. Should he just override this to balance?

Re: Balance sheet issue

JamesG1 — Sun, 18 Feb 2024 22:09:52 GMT

Do not recommend overriding to balance the balance sheet.

Are you working with an income statement and balance sheet from an accounting program? Please advise.

Your balance sheet, perhaps, has Cash on hand, a Checking account and/or Receivables as assets offsetting the 1120S liabilities.

It is difficult to know how to answer without seeing the tax return.

Re: Balance sheet issue

LillianRose — Sun, 18 Feb 2024 22:33:39 GMT

He owns several rental properties. So I entered last year's asset amount minus depreciation, total 212356. All that is offset to RE. For 2023, assets minus depreciation are 340652. TT is generating RE figure of 239706, which is correct if I add net profit of 27350 to last year's RE. However, that leaves me out of balance by 100946. Where does that go????

I'm so confused!!!

Re: Balance sheet issue

Mike9241 — Mon, 19 Feb 2024 06:05:28 GMT

at the end of the year there would likely be

1) cash

2) building cost

3) accumulated depreciation on 2)

4) other assets - not amortizable

5) other assets amortizable

6) accumulated amortization on %

2 and 3 and 5 and 6 should be automatic from the depreciable properties entries

1 + 2 - 3 +4 + 5 - 6 is total assets - automatically computed

7) mortgages payable

😎 other liabilities

Total assets - 6 - 7 is his equity at the end of the year

however this needs to be broken down between undistributed earnings/loss since inception - the accumulated adjustment account - AAA (can't be negative at the start of the year M-2 line 1 column a)

and his other equity like cash he bit in for down payments on the property.

there is no easy way to determine these numbers except by going through the k-1s for every year the S-Corp was in existence. If it wasn't always an S-corp that complicates matters.

as a suggestion and no assurances that the correct number would be arrived at. the AAA at the beginning of the year would be the net income minus the net loss reported on all the k-1's from inception through 2022 and minus any distributions to shareholders and minus any expenses reported as non deductible through 2022. the total of non taxable income goes in M-2 column d - other adjustment account (OAA)

his equity at the beginning of the year would thus consist of the beginning AAA account the beginning OAA account and the difference as paid in capital line 23 of the 1120S schedule L

there can be many reasons why the numbers don't come out. in this case, you need to use a tax pro who can go through the returns and k-1s. hopefully, your husband kept copies of these for all years.

Re: Balance sheet issue

LillianRose — Mon, 19 Feb 2024 12:51:32 GMT

Of course! Thank you so much. Additional paid in capital was for the new property purchased in 2023!

Thank again.