Entering Partner's contributed property at the bottom of 1065

Apr 03, 2011 1 Replies
C

My son and I are partners in a farm registered as LLC.



Last year we bought a tractor and some other equipment and entered the cost of the tractor as a capital property contribution to the LLC.



This year we are entering our expenses from Schedule F as cash contributions on Form 1065, Schedule M-2, line 2a, but we have some depreciation do we enter the depreciation as a property contribution? Should it be a positive or negative number? Form 1065, Schedule M-2, line



2b. Also we had some losses, one goat got hit by a car before we could finish depreciating her and one goat died. Should the loss of these goats go into this line as well?

I have read as much as I can, but I cannot find anything super simple about capital accounts. Our tax information is not any different from our "books". In fact the only reason we keep any books is so we can do taxes.



thanks for any help.


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G

With all due respect, you are in WAY over your heads. You need to get a tax pro familiar with both farms and partnership taxation. FYI, Partnerships are the most convoluted and intricate of all the entities. Capital contributed is just that - money or stuff you put in that you've paid for personally. If the item was purchased with funds in the farm's bank account then it is NOT contributed capital. Quite frankly I cannot tell from you post HOW you actually acquired the tractor and whether it should have been treated as contributed capital or not.

The M-1 and M-2 need to reflect certain information and while most of pros here are happy to help whenever we can, there is NO WAY any of us can give you enough information via this forum, especially considering the miniscule amount of information you've posted, to help you enough for you to have any confidence that any return you prepare would be substantially correct. It also isn't possible for us to teach you how to prepare a partnership return via this forum.

I would strongly encourage you to get with a tax pro in your area. If you're a legitimate business you have to understand that professional tax help is no different than buying a tractor - you need something that you cannot do on your own.

Gene E. Utterback, EA, RFC, ABA

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