topic Unable to edit beginning inventory value on Form 1120S in Deductions & credits

Unable to edit beginning inventory value on Form 1120S

sambatraore26 — Thu, 25 Jun 2020 12:05:08 GMT

Hi. It is the first time that I am filling Form 1120S. I filed Form 1065 in 2018. I had 40k ending inventory at the end of 2018.

I am unable to input beginning inventory of 40k on From 1120S for 2019. It keeps showing 0. When I click on the edit tab next to the beginning inventory line, I am only asked to enter information on ending inventory not beginning inventory.

Your help will be greatly appreciated.

Thanks!

Re: Unable to edit beginning inventory value on Form 1120S

Critter — Thu, 25 Jun 2020 12:36:24 GMT

Well since this is a new entity which did not have a life in 2018 the beginning inventory must be zero. The inventory that you brought from the old business is entered as new inventory (purchased) on the new business.

Re: Unable to edit beginning inventory value on Form 1120S

Carl — Thu, 25 Jun 2020 15:13:07 GMT

I am assuming the 1065 was for a partnership, and not a multi-member LLC. If my assumption is wrong, please let me know.

Overall, I think you may find it better to seek professional help for at least this year for correct reporting/closeout of the 1065 and issuance of final K-1's for that, as well as the transfer of all assets and other stuff to the new S-Corp.

Since 2019 is the first tax year the S_corporation existed, the BOY (Beginning of Year) Inventory Balance must be zero. No exceptions.

Additionally, if 2018 was the last year the multi-member LLC/Partnership existed, the IRS does not consider that 1065 business closed until several conditions are met.

- The EOY (End of Year) Inventory Balance must be ZERO. No exceptions.

- All end of year cash balances must be zero. (no exceptions)

- All assets must be disposed of so the partnership does not own any assets at the end of the year.

- If the partnership claimed any vehicle use (even if less than 100% business use) then disposition of those vehicles must be shown.

For the inventory on the 1120-S, your BOY Inventory Balance *MUST* match y our prior year EOY inventory balance. Since the corporation did not exist on Dec 31 of 2018, there is no way the corporation can have more than a $0 inventory balance on Jan 1 of 2019.