Land

[ILLMAS]

Okay, a TP has his accounting very well organized (don't see many like this), and he is capitalizing 100% the cost of the building, I in turn, I am allocating 10% of land use for tax purposes. ATX is giving me a warning that the amount entered on Sch L for land does not match the amount on Form 4562. I am entering the BS per books, so I am not entering anything under land, however in the cost of building I lowered it by 10% in ATX. I know it's just a warning and not an error, but my BS balances per books, I know if I lower the cost of building on Sch L and put the amount under land, I still balance, but I would like to match it to the financial statements, do you see any potential problems with this.

Thanks

[Wayne Brasch]

Okay, a TP has his accounting very well organized (don't see many like this), and he is capitalizing 100% the cost of the building, I in turn, I am allocating 10% of land use for tax purposes. ATX is giving me a warning that the amount entered on Sch L for land does not match the amount on Form 4562. I am entering the BS per books, so I am not entering anything under land, however in the cost of building I lowered it by 10% in ATX. I know it's just a warning and not an error, but my BS balances per books, I know if I lower the cost of building on Sch L and put the amount under land, I still balance, but I would like to match it to the financial statements, do you see any potential problems with this.

Thanks

Why not make an adjusting entry for him to enter into his accounting records and get his records to correspond with your tax handling of his situation which, of course, is the correct way to handle this matter for tax purposes? That way there should never be any problem with it and the Balance Sheet and tax return can match as they should.

Wayne Brasch

[kcjenkins]

I think that the land should be shown on the books as well as on the tax books. In other words, it should be shown the same for financial reports and tax reports.