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It's not going to be easy


ILLMAS

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Please now add stock and debt basis worksheet to your 1120S, supposedly it’s been required since 2016, it’s in the instructions, but out of a seminar group of 500 plus people no one knew about it.  This only applies in certain cases, but it will be a good idea to review the instructions.

 

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2 hours ago, ILLMAS said:

Please now add stock and debt basis worksheet to your 1120S, supposedly it’s been required since 2016, it’s in the instructions, but out of a seminar group of 500 plus people no one knew about it.  This only applies in certain cases, but it will be a good idea to review the instructions.

 

I've been doing that since 1996.

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5 hours ago, Abby Normal said:

I've been doing that since 1996.

 

1 hour ago, ILLMAS said:

Congrats, we needed you in the seminar.

 

We should start a separate topic on all of the things preparers don't do or don't provide to clients that cause huge messes later on.  Basis issues is one that shouldn't be that difficult since the tax programs have input and worksheets for this. Another one that is missed and that is not in the tax programs is calculating accum E&P for C corps.

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7 hours ago, jklcpa said:

 

 

We should start a separate topic on all of the things preparers don't do or don't provide to clients that cause huge messes later on.  Basis issues is one that shouldn't be that difficult since the tax programs have input and worksheets for this. Another one that is missed and that is not in the tax programs is calculating accum E&P for C corps.

I agree wholeheartedly.  Basis issues are accommodated in tax software, but inadequately instructed with confusing narrative menus instead of direct entry.  Basis and Capital Balances are rarely the same.  Accumulated E&P is another problem.

I have gone behind other preparers who have done corporate and partnership returns, and immediately see there is no balance sheet from the prior year.  Regardless of how small the entity, if we do not prepare a balance sheet, together with reconciliation of taxable-to-book income, we are failing the customer.  Balance sheets are promulgated by GAAP, not by taxable income, and we should be on top of this, or we need help.

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On 8/24/2018 at 1:55 AM, Edsel said:

Regardless of how small the entity, if we do not prepare a balance sheet, together with reconciliation of taxable-to-book income, we are failing the customer. 

I agree completely.  One of my partners asked why I was bothering with a balance sheet for a tiny company, and told him a Reader's Digest Condensed edition of @Edsel's excellent explanation.  He got it immediately and agrees.  (He does them all the time, but had not had such a tiny company in-house before and knew only that it wasn't require to be sent with the return.)

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