1120 S -- Balance sheet out of balance by amount equal to undistributed income (RE)

[TMDryden]

Hi,

I am one of 2 shareholders in an LLC taxed as an S-Corp.  My net income and retained earnings calculations seem fine, but the balance sheet section is out of balance.  I entered the same info from my QB balance sheet, but the TurboTax calculation for Total Liabilities, Capital, and Retained Earnings is too high.  It's off by the amount of current year RE, as if it is being counted twice...what did I do wrong?  The Asset portion is correct.

[tagteam · Accepted solution]

It appears as if you may need to make an adjustment on the asset side. 

Note that this may be a different process than your QB balance sheet (which, I believe, automatically adjusts).

[TMDryden]

Thanks so much for the reply.  I'm not seeing an opportunity to make an adjustment on the asset side...we are a service organization using the cash method, so the only real asset is what was in the business checking account at year end, correct?  That is the asset amount shown in both QB and Turbo Tax.  In QB, the Liabilities and Equities section is balanced, but that section is off in Turbo Tax by just the RE amount.  Are you able to provide an example of the type of adjustment that would correct the imbalance based on the info that I have provided?

[tagteam]

You might merely need to debit your cash account if you have made no distributions. It is extremely difficult to determine without seeing the entire balance sheet.

However, Support is occasionally able to walk users through the process (see link below).

https://ttlc.intuit.com/community/using-turbotax/help/what-is-the-turbotax-phone-number/00/25632

[TMDryden]

It seems to me that something is wrong on the Liabilities & Equity section, but I appreciate your time and assistance.