I recorded $2,500 in non cash contributions on a S-Corp. Now my Balance Sheet is out of balance of course. How do I offset this? Thanks!!

[PhoebeRoberts · Accepted solution]

This is a Schedule M book-tax difference.

Be aware that you only get FMV as a deduction if the property would have generated capital gains, not ordinary income, if sold.

[Marianne436]

Thank you Phoebe!!

[George4Tacks]

Add a non cash asset?

[Marianne436]

my assets are more than my Liabilities & equity with this non cash contribution.

[IRonMaN]

What was the contributed that was non cash?

[George4Tacks]

I think maybe a deduction of non-cash to Goodwill or something like that. As opposed to a shareholder contribution of stuff, you gave away stuff?

[IRonMaN]

I'm not sure.  I wish Intuit hadn't dropped the mind reading courses.  Although the new hostage crisis classes seem to be helpful.

[Marianne436]

It was office furniture donated to Habitat for Humanity

[PhoebeRoberts]

Your deduction is limited to basis (zero!) because the depreciation recapture would be ordinary if it had been sold.

[Marianne436]

Thank You! Yes you are right!

[George4Tacks]

A reduction in non-cash asset given away?