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I have a client who is a SMLLC and has completed Form 2553, to be taxed as an S Corporation; from what i am reading it looks like it is pretty simple; however, I want to ensure that the entries to move the Balance Sheet items over to the S Corporation are done correctly. Do you have any insight into this that you would be so kind to share with me? I am completing a 351 Transfer Statement to include with the tax returns. From what I have read, I will basically start with a zero Beginning Balance Sheet and reflect the transfer Amount as an M-2 Other Additions for the Balances transferred from the SMLLC books. Does this make sense to you?
Thank you so much!
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Effective 1.1.2023 - 2023 Tax Year
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I have read differing ways of handling this. One suggested the 351 to reflect the transferring in of the basis to the S Corporation. So, are you saying that all that I need to do is record the M-1 addition for the basis transferred over and continue on?
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I have been struggling to find anything specific on this and since I would need to reflect this as a first year S corporation tax return, I had thought that I would not reflect beginning balances. I do not want to cause any issues.
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That is totally correct. Do you think that I need to attach a statement or something to the return to prevent any questions or issues. It should be pretty straight forward since the 2553 was approved. I think that I am totally just over thinking it. Thank you!
