topic Brokerage accounts and Balance Sheets in Business & farm

Brokerage accounts and Balance Sheets

Gregg6 — Sun, 07 Mar 2021 23:54:37 GMT

Hi,

I have a LLC that files as a C corp that holds investments in a brokerage account. The assets this year fall above the $250,000 cut-off for requiring a balance sheet in Turbo Tax Business. My Brokerage account paid out ~$3000 dividends that I need to pay tax on but the stocks that I have not sold have increased this year but I still hold them and shouldn't need to pay capitol gains until I sell them. However, the beginning year and end year difference for the brokerage account difference make is so that my balance sheet does not balance. I am the sole owner of the LLC so I does the balance sheet need to balance for me to file?

How do I account for the discrepancy in my brokerage account in order to balance the sheet?

Thanks

Re: Brokerage accounts and Balance Sheets

Rick19744 — Mon, 08 Mar 2021 00:02:16 GMT

The balance sheet is to be reflected based on your internal books and records which will not agree to your tax books and records.

I believe most of the items on the balance sheet are input manually.

Do you have an M-1 for unrealized gains on line 7? You should and possibly this will fix your issue, but not absolutely positive.

Re: Brokerage accounts and Balance Sheets

jc152 — Sat, 18 Feb 2023 06:24:03 GMT

Hi @Gregg6 I'm in the same boat as you. What did you end up doing? Did you take @Rick19744 advice and enter unrealized gain/lost under M1 line 7? In my case it's unrealized lost. If you can share how you balance your book that'll be great. Thanks!

Re: Brokerage accounts and Balance Sheets

BrittanyS — Mon, 20 Feb 2023 14:34:00 GMT

Unrealized income or losses are recorded in an account called accumulated other comprehensive income, which shows on the owner's equity section of the balance sheet. This category represents gains and losses from changes in the value of assets or liabilities that have not been sold.

@jc152

Re: Brokerage accounts and Balance Sheets

jc152 — Mon, 20 Feb 2023 16:52:45 GMT

hi @BrittanyS ,

Where is this account "accumulated other comprehensive income" so I can enter this? What schedule/form is this in? or is this in turbo tax business application?

Re: Brokerage accounts and Balance Sheets

BrittanyS — Mon, 20 Feb 2023 17:37:08 GMT

The accumulated other comprehensive income is excluded from the net income as gains or losses are yet to be realized. Instead, it is entered under the equity portion of your balance sheet on the Schedule L form. You can find this in TurboTax Business by following these steps:

Click Federal Taxes from the top navigation
Click Balance Sheet
Choose to guide me or quick entry
Enter Assets
Accumulated other comprehensive would be entered under your liabilities and capital section

You will want a balance sheet prepared when entering the information into TurboTax. The balance sheet should list the following:

Total Assets, liabilities, and shareholder's equity (accumulated other comprehensive income is listed here). The Liabilities plus the shareholder's equity should equal your total assets. There will not be a separate entry for the accumulated other comprehensive income as it is a factor in your equity amount.

@jc152

Re: Brokerage accounts and Balance Sheets

jc152 — Mon, 20 Feb 2023 19:57:15 GMT

Hi @BrittanyS ,

hmm I don't see "Accumulated other comprehensive " in schedule L under liabilities and capital section. I've checked Turbo tax form as well as the raw IRS form. Can you send me a screenshot from your end showing me that line?

Re: Brokerage accounts and Balance Sheets

BrittanyS — Tue, 21 Feb 2023 16:22:27 GMT

From your screenshots, you may need to view the business info section and verify how your business is categorized. Other comprehensive income is an adjustment to a shareholder's equity account, which occurs for S Corps or C Corps. You can get to the screen for the shareholder equity adjustment by following these steps:

Click Federal Taxes
Click Balance Sheet
Continue to the Enter your Liabilities and Capital
Scroll Down to Capital and Retained Earnings
Enter Other comprehensive income under Adjustments to Shareholders' Equity (Screenshot provided)

@jc152