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Old 02-20-2017, 11:04 AM
cyberENA cyberENA is offline
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Join Date: Jun 2006
Posts: 43
Smile Question about equity

I am using QB Pro 2015. I run S Corp, Im the only shareholder / employee.

I was confused about equity. I believe it means things the corp owns or that didnt pass through right?

There were items listed that are normally expenses but logged as equity in our QB. I deleted it all so we have zero equity. If our S Corp has no properties, vehicels etc under corp name, then it is NORMAL that an S Corp like mine may have no equity recorded?

Truly appreciate the help!
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Old 02-21-2017, 12:56 AM
Lorin Browning Lorin Browning is offline
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That's not quite correct.

Equity includes(among other things):
  • Investments in the corporation by the stockholder (usually through the issuing of stock)
  • Earnings from the corporation (which is revenues less expenses)
  • Less withdrawals from earnings
  • Less repayment of investments in the company

In accounting procedures, the corporate equity on the balance sheet is the difference between total assets less total liabilities. And that balance sheet amount for equity must equal the totals listed above (which is not intended to be an all-inclusive list).

Look at lines 22 to 26 of Schedule L of IRS form 1120S at https://www.irs.gov/pub/irs-pdf/f1120s.pdf
For further information, see http://www.watsoncpagroup.com/kb/s-c...ction_328.html
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Last edited by Lorin Browning; 02-21-2017 at 01:37 AM.
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  #3  
Old 02-23-2017, 07:26 AM
cyberENA cyberENA is offline
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Quote:
Originally Posted by Lorin Browning View Post
That's not quite correct.

Equity includes(among other things):
  • Investments in the corporation by the stockholder (usually through the issuing of stock)
  • Earnings from the corporation (which is revenues less expenses)
  • Less withdrawals from earnings
  • Less repayment of investments in the company

In accounting procedures, the corporate equity on the balance sheet is the difference between total assets less total liabilities. And that balance sheet amount for equity must equal the totals listed above (which is not intended to be an all-inclusive list).

Look at lines 22 to 26 of Schedule L of IRS form 1120S at https://www.irs.gov/pub/irs-pdf/f1120s.pdf
For further information, see http://www.watsoncpagroup.com/kb/s-c...ction_328.html


Thanks for your reply. However given Im scorp, isnt all income pass through so it all gets taxed. If I dont own anything under corp name, then is the equity bsically whats left in the bank? Or is it ZERO because whats left after salary is paid out as distribution/dividends to the shareholders?
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