1120s M-1 differenc

[dkutej]

I had to adjust the inventory in QB.  Because of that adjustment, the M-1 is off by that exact amount.  It's because my book COGs is different than the 1120s COGs.  Is there a place where I need to state that adjustment in Proseries.

[dkh]

Are you not using the same inventory amount on the 1120S as you have in QBs?   Why wouldn't an inventory adjust to COGS in QB be reflected in the numbers used on the tax return?    Did you change your Schedule M1 - Net income per books after you made this adjustment?

[dkutej]

Thanks for your response! Yes the inventory is the same in QB as it is on the 1120s.  The purchases are the same and the net income are the same.  Its definitely in the COGs area.  COGs in QB is 198,793.96 and COGs on 1120s is 202,616, the exact amount I entered in QB to adjust the inventory. I dated the adjustment 12-31-21 and I credited Inventory and debited Purchases $4121.

[dkh]

Purchases in the 1120S needs to be total without QB inventory adjustment because return calculates COGS  from the beginning less ending inventory plus purchases, labor, etc.  

[dkutej]

I knew I had to be doing something wrong!!!   Thanks so much!!

[dkutej]

Now my Schedule L is off that amount ugh.