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CG2020 Tax Information
Level 2

How to Correct Errorrs in Form 1065 Balance Sheet

The balance sheet filed with my 2020 From 1065  was the first tax return for a newly formed LLC.  Unfortunately, the balance sheet did not reflect pending trades that had not settled as of the end of the year.  As a result, the balance sheet did not include acquired positions that had not yet settled and included stock for unsettled sales.  Since the balance sheet is inconsistent with the tax treatment, it will throw everything out of balance for the next year.

 

Do I need to go back and amend the prior year?  Is the amendment press difficult?

3 Replies
tagteam
Level 15

How to Correct Errorrs in Form 1065 Balance Sheet

I will page @Rick19744 but, fair warning, balance sheet issues are difficult to diagnose with this format (i.e., a message board).

 

Also, are you certain that you are required to maintain a balance sheet?

CG2020 Tax Information
Level 2

How to Correct Errorrs in Form 1065 Balance Sheet

Yes, I have to generate a balance sheet.

Rick19744
Level 12

How to Correct Errorrs in Form 1065 Balance Sheet

A few comments:

  • While you may not need to reflect a balance sheet on the tax return, personally, I think it is a good idea to maintain them.
  • Based on the limited facts, I am interpreting that your 2020 tax return was correct as filed and it is really just a balance sheet presentation matter?
  • If bullet 2 is accurate, then just fix the balance sheet.
    • It would be best to have beginning agree to 2020 ending and just make end of the year correct.
    • If that becomes too difficult, then just correct beginning so it flows as it should.
  • Not a big deal if audited or you receive a letter.  Easily explained and doesn't appear that any incorrect accounting errors exist based on the limited facts.  Even if there were, only one year and that does not establish a method of accounting.
*A reminder that posts in a forum such as this do not constitute tax advice.*

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