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10054: 1065/1120S/1120/990 - Schedule L - Beginning or End of Year Blank


Fed Returns Generally

Why is the Schedule L beginning or end of tax year blank?

Initial Return 

A partnership, corporate, or tax exempt organization return that has the box Initial Return marked on screen 1 should not have any beginning balances on the Schedule L, so the software blanks out this column.

An S corporation return that has:

  • the Date of Election as an S corporation and the Date incorporated both equal to the beginning of the tax year (January 1st for calendar years, or the fiscal year beginning date for fiscal year returns), and
  • the First year as an S corporation box selected

    should also not have any beginning balance on the Schedule L.

If you have entered beginning balances in either a 1065, 1120S, or 990, the software produces Notes page 349:

INITIAL RETURN HAS BEGINNING-OF-YEAR ENTRIES ON BALANCE SHEET. This
return is marked as an "Initial return" on screen 1, and amounts are
included for the "Beginning of Year" column on the Schedule L (column
a or b). Return to screen L to review these entries.

HINT: Beginning inventory may have been entered on screen A, line 1,
or assets may have been entered on the 4562 screen with a "Placed in
Service" date prior to the current tax year beginning date.

Final Return 

Similarly, a return that is marked Final Return on screen 1 should have no ending balances on Schedule L, so the software blanks out that column.

If ending balances have been entered in a 1065,1120, 1120S, or 990, the software produces Notes page 342:

FINAL RETURN HAS END-OF-YEAR ENTRIES ON BALANCE SHEET. This return is
marked as an "Final return" on screen 1, and amounts are included for
the "End of Year" column on the Schedule L (column c or d). Return to
screen L to review these entries.

HINT: Ending inventory may have been entered on screen A, line 7,
or assets may have been entered on the 4562 screen with a "Placed in
Service" date after the current tax year ending date.

Note: Beginning with Drake14, BOY and EOY totals are displayed on the L screen. 


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