I am working on a 1065 and the only income/loss is from K-1s. On one K-1, it shows that this 1065 contributed capital to the K-1 pass-through. Where do I enter that to show the 1065's increase in basis?
The balance sheet should have an asset called "investments." The capital contributions would be an increase in the investments.
Income passthroughs would also be increases in investments, and distributions and losses would be decreases.
It sounds like you haven't done the accounting for the entity, yet. I would suggest doing that before you try to do the return. its pretty difficult to prepare a return with financial statements, of any kind.
I figured it out. There are no financials for this entity per se. The amount goes under contributed captial on screens 28. The partners contributed the capital to the 1065 and the 1065 turned around and contributed it to the pass-through entity. It does not keep cash in an account for this entity.
Thanks to all who answered. I appreciate it!
I did not try to make it sound like I was adding cash to the b/s, but the entries would go like this:
DR Cash CR Capital
DR Investments in K-1s CR Cash
Accountant Man, sometimes when I have partnership clients that don't have a bank account, I might even make a general journal entry showing simply:
Dr Investments
Cr Capital
Thanks to all... that's what I ended up doing. I guess I just needed to ask the question "out loud." It's been a long week.
Thanks again!
Of course the entry can be condensed into:
DR Investments CR Capital
I just figured the money should have come into the p-ship before it went into the K-1s. Semantics(but a better paper trial).
