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Robert M.
Robert M., Consultant
Category: Financial Software
Satisfied Customers: 3027
Experience:  30 yrs. of computer experience in financial and marketing departments.
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Pearl. A new client of mine transitioned from a sole prop

Customer Question

Hi Pearl. A new client of mine transitioned from a sole prop to an S Corp mid-year but did not create a new QuickBooks file. He did his taxes using Turbo Tax for business and everything looks correct with the exception of the balance sheet not balancing. Not sure how to advise him of what to do.
JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: NO
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Submitted: 10 months ago.
Category: Financial Software
Expert:  Jason M. Tyra, CPA replied 10 months ago.
Hi There:Did your client do a split year return with part of the year on Schedule C and part of the year on Form 1120S?
Customer: replied 10 months ago.
Yes, exactly.
Expert:  Jason M. Tyra, CPA replied 10 months ago.
Usually when the balance sheet is out of balance it is because the taxpayer took distributions but didn't book them as such, so they aren't showing up on his K-1.
Expert:  Jason M. Tyra, CPA replied 10 months ago.
If the S Corp had less than $250k in revenues and less than $1,000,000 in assets, then you might not have to file Schedules L and M-1
Expert:  Jason M. Tyra, CPA replied 10 months ago.
That doesn't solve the problem of being out of balance on 1120-S, but it does make it irrelevant for tax filing purposes.
Expert:  Jason M. Tyra, CPA replied 10 months ago.
By the way- the asset limit is also $250k, not $1MM