Solved: FORM 1065: devaluation of stock in balance sheet?
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GG2020
Level 1

FORM 1065: devaluation of stock in balance sheet?

If an investment club's holding of stocks lost value last year (not sold yet), where should the devaluation of stock be put in Form 1065?

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MinhT1
Expert Alumni

FORM 1065: devaluation of stock in balance sheet?

The stock provision is not reported separately on Schedule L of form 1065.

 

Inventories, net of provisions, are reported on line 3 of Schedule L.

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DianeC958
Expert Alumni

FORM 1065: devaluation of stock in balance sheet?

Yes, if you want to devalue them on the balance sheet of the company you can make that adjustment.  The adjustment would be only a balance sheet item and not have any tax effect since you have not sold the stock.

 

The value of stock you are holding does not become a taxable event until the stock is sold.

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GG2020
Level 1

FORM 1065: devaluation of stock in balance sheet?

Which line in Schedule L should the information be recorded?

 

Thanks!

MinhT1
Expert Alumni

FORM 1065: devaluation of stock in balance sheet?

The stock provision is not reported separately on Schedule L of form 1065.

 

Inventories, net of provisions, are reported on line 3 of Schedule L.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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