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Robert M.
Robert M., Consultant
Category: Financial Software
Satisfied Customers: 3043
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
JA: OK. Got it. I'm sending you to a secure page on JustAnswer so you can place the $5 fully-refundable deposit now. While you're filling out that form, I'll tell the Accountant about your situation and then connect you two.
Submitted: 1 year ago.
Category: Financial Software
Expert:  Jason M. Tyra, CPA replied 1 year 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 1 year ago.
Yes, exactly.
Expert:  Jason M. Tyra, CPA replied 1 year 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 1 year 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 1 year 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 1 year ago.
By the way- the asset limit is also $250k, not $1MM