Help with Tax form 1120S

5 Replies

Here is the scenario...

S-corp LLC was established in Feb 2018 for residential real estate investing/flip.

It started with cash deposits from both managing members to purchase a single family home in Feb 2018 for $80k. The property was updated and resold in June 2018 for $150k. Then another property was purchased in December 2018 for 90K using profits from the sale of the first property. No loan, all cash.

The expenses have been divided by categories (materials, utilities, paid contractors, insurance, other outside services, etc) and listed on the 1120S using TurboTax Business.

My question is, how do I determine the Total Assets for Item F of Form 1120S?

Thanks in advance & God Bless!

Originally posted by @Jesus R. :

Here is the scenario...

S-corp LLC was established in Feb 2018 for residential real estate investing/flip.

It started with cash deposits from both managing members to purchase a single family home in Feb 2018 for $80k. The property was updated and resold in June 2018 for $150k. Then another property was purchased in December 2018 for 90K using profits from the sale of the first property. No loan, all cash.

The expenses have been divided by categories (materials, utilities, paid contractors, insurance, other outside services, etc) and listed on the 1120S using TurboTax Business.

My question is, how do I determine the Total Assets for Item F of Form 1120S?

Thanks in advance & God Bless!

Hey Jesus

May want to hire a tax pro

Most of those expenses related to that new property don't get deducted. 

You need to know how to calculate that gain. 

You need to capitalize all holding costs. 

Turbo tax  will 100% let you file this completely wrong. 

Originally posted by @Jesus R. :

Hi @Natalie Kolodij , I appreciate your immediate response.

Why am I NOT surprised about your TurboTax comment? :)

Turbo Tax is a great program. It calculates things perfectly. I get a great deal of Audit Representation work from it. However, the information is only as good as the tax knowledge of the person preparing the return.

It sounds like you do not have correct financial statements which means bookkeeping needs to be done appropriately. 

Keep in mind if you and your business partner took different amounts out of the corporation you have invalidated your election to be taxed as an S-corp and will be considered as a C-corporation.

In business you do not want to be penny wise and pound foolish.