JJStephens Posted April 13, 2012 Report Share Posted April 13, 2012 New client just gave me their LLC books for last year . . . in the form of a download from their bank account. Fortunately, there were only about 60 transactions. One of them has me stumped. One of the two members took $2600 both agreed would be a loan. I advised them to draw up a loan agreement and to stick to its terms; otherwise, it would have to be characterized as a draw. My question is-- does the loan need to be recorded on the 1065? If so, where? Quote Link to comment Share on other sites More sharing options...
michaelmars Posted April 13, 2012 Report Share Posted April 13, 2012 how about sch L line 7a "loans to partners" Quote Link to comment Share on other sites More sharing options...
JJStephens Posted April 13, 2012 Author Report Share Posted April 13, 2012 Well, duh! That makes sense. Can you tell I don't do too many of these? This one is so small it is not required to do Sch L or M. Thanks! Quote Link to comment Share on other sites More sharing options...
Lion EA Posted April 13, 2012 Report Share Posted April 13, 2012 Prepare Schedule L for yourself and print it out for your file. You don't have to file it. Quote Link to comment Share on other sites More sharing options...
OldJack Posted April 13, 2012 Report Share Posted April 13, 2012 Schedule L should always be filled out and filed with the tax return for several reasons regardless of requirement. 1. It shows there is proper bookkeeping for the business and maybe less likely for audit. 2. It shows full information to the members. 3. It makes you look like you know what you are doing. If you don't do a balance sheet how would you know income and expense is correct? 4. It shows you have done proper accounting/tax prep of income and expense... as errors would be obvious on the balance sheet if you didn't do a correct balance sheet. 5. It shows you are a professional and not just some preparer that doesn't know anything about business accounting. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted April 13, 2012 Report Share Posted April 13, 2012 Hey, OldJack. I always file Schedule L. I need it for myself to know it's balanced. And, a future preparer'll need it. And, I or the client or that future preparer need it when they dissolve the company. And,.... As you say, it shows our worth to the client and probably heads off some IRS concerns, too. Quote Link to comment Share on other sites More sharing options...
michaelmars Posted April 14, 2012 Report Share Posted April 14, 2012 i agree with OldJack - always file Quote Link to comment Share on other sites More sharing options...
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