Balance Sheet Out of Balance

[KG1965]

I have switched from a sole proprietor in 2023 to an Scorp in 2024 - I have some assets that were not fully depreciated - so I input them into the assets list as per the guideline of using the actual purchase date and getting the correct depreciation for 2023.  The problem is that this created a balance in the 2023 balance sheet which there is no offsetting liability for this amount.  So my 2024 balance sheet is off.  How do I fix this?  And yes I am required to do the balance sheet.

[MindyB]

You should have taken the same amount of depreciation on the assets as a sole proprietor in 2023 or as an S-Corp.  Did you make an error in your calculations?  If so, you need to correct this.  If you computed depreciation incorrectly only in 2023, you can amend 2023.  If the depreciation method was incorrect for 2 years or more, it is considered an accounting method change and will need to be corrected via a Change in Accounting Method on Form 3115.  You'll need to use TurboTax Desktop to file a Form 3315.

Your beginning balance sheet can't adjust the depreciation taken in 2023 unless you amend 2023.  If you do the method change, you will use the accumulated depreciation you took, and your retained earnings will have to reflect that.  

See: Form 3115 Instructions