FORM 1065: devaluation of stock in balance sheet?

[GG2020]

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?

[DianeC958]

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.

[GG2020]

Which line in Schedule L should the information be recorded?

Thanks!

[MinhT1 · Accepted solution]

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.