topic 1065 Form Depreciate asset effect on Partner Capital in Business & farm

1065 Form Depreciate asset effect on Partner Capital

boertiii — Wed, 24 Feb 2021 08:19:58 GMT

Hello,

I am having what I think should be a simple problem to solve. I have a Limited Liability Partnership and I am working on the 1065 form. Because the entity was formed in PA I have to complete a balance Sheet. The issue I am having:

When I try balance my Schedule L it is coming up as out of balance. What is strange is it’s out of balance by the exact amount of last years large asset purchase which was 100% depreciated thanks to the jobs act.

So my assumption from this is that when you depreciate an asset it comes off of the Partner Capital account. Is this correct, or should it be handled in some other way?

Thanks for your help!!!

Re: 1065 Form Depreciate asset effect on Partner Capital

Anonymous_ — Wed, 24 Feb 2021 15:59:35 GMT

Did you finance the purchase or pay cash?

Re: 1065 Form Depreciate asset effect on Partner Capital

hoboXL — Wed, 24 Feb 2021 18:28:58 GMT

Paid with Cash

Re: 1065 Form Depreciate asset effect on Partner Capital

Anonymous_ — Wed, 24 Feb 2021 18:51:29 GMT

Is there a credit (decrease) in your cash account?

Re: 1065 Form Depreciate asset effect on Partner Capital

hoboXL — Wed, 24 Feb 2021 19:27:46 GMT

Yes

Re: 1065 Form Depreciate asset effect on Partner Capital

Anonymous_ — Wed, 24 Feb 2021 19:32:56 GMT

What about accumulated depreciation?

Re: 1065 Form Depreciate asset effect on Partner Capital

hoboXL — Wed, 24 Feb 2021 19:38:36 GMT

Yes, it was fully depreciated.

So, are you saying that depreciating an asset does NOT decrease owners capital or it Does?

Re: 1065 Form Depreciate asset effect on Partner Capital

Anonymous_ — Wed, 24 Feb 2021 19:59:54 GMT

What I meant was there is an accumulated depreciation account and that should be credited (decreased).