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Old 01-20-2012, 12:45 PM
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Smile Income/Loss Reconciliation for Schedule K for 1120S

I have trouble understanding #18 Reconciliation for Scheduke K for 1120S form. And it asks me to " Combine the amounts on lines 1 through 10 in the far right column. From the results, subtract the sum of the amounts on lines 11 through 12d and 14I". This is more confusing to me since I usually put down those non-zero numbers on the left column and leave the far right column blank. Could someone tell me what this is about?
I only have non-zero numbers on #1. Ordinary business income(loss) and #11. Section 179 deduction in Schedule K since we are a start-up business. So should I put down zero for "Reconciliation"?

Thanks a lot.



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Old 01-22-2012, 04:16 AM
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“I have trouble understanding #18 Reconciliation for Scheduke K for 1120S form. And it asks me to " Combine the amounts on lines 1 through 10 in the far right column. From the results, subtract the sum of the amounts on lines 11 through 12d and 14I". This is more confusing to me since I usually put down those non-zero numbers on the left column and leave the far right column blank. Could someone tell me what this is about?”---->Non-zero numbers put down on the left column are NOT reported on Sch K of 1120S; for instance, you need to report ordinary dividends on line 9a of Form 1040, NOT on Sch K of 1120S. If box 3a is a loss, follow the Instructions for Form 8582 to figure how much of the loss can be reported on Schedule E (Form 1040), line 28, column f , NOT on Sch K of 1120S.So, you actually need to combine the amounts in the far right clumns to determine the amount on Sch K , line 18.
“I only have non-zero numbers on #1. Ordinary business income(loss) and #11. Section 179 deduction in Schedule K since we are a start-up business. So should I put down zero for "Reconciliation"?”----> It depends on the aout after reconciliation between book to tax icnoem (loss) on Sch M-1 of 1120S.You need to report the amount from line 12 of Form 4562 allocable to a passive activity using the Instructions for Form 8582. The corporation does not deduct the expense itself but passes the expense through to its shareholders. You need to report each individual shareholder’s pro rata share on Schedule K-1, line 11.I mean you need to reconcile your book to tax income on Sch M-1 of 1120S. For example, assume that the amount on line is $40,000, $720 on line 4, $2,000 on line 5a and $10,480 on line 8a Also assume that the amount on line 11 is $7,000, then amount on line 18 is $53,200-$7,00=$46,200and the amount on Sch M-1 of 1120S line 8 must be also $46,200.(you need to file Sch M-1 of 1120S for reconciliation between book to tax income(loss). The amount reported on line 18 must be the same as the amount reported on line 8 of Schedule M-1 or line 26. Say if the amount on line 1 Sch K is $10,000 and the amount on line 11,Sec 179 deduction, deductions is $20,000, then the amount on line 18 is ($10,000) loss;$10,000-$20,000.



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Old 01-23-2012, 11:34 AM
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Thank you for your reply and it is very helpful.



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