Partner's Capital Account

[TAX]

Client is a LLC with 4 members. When I do accounting in QB, it has net income and RE in Balance Sheet. So I transferred this to Partner's capital account proportionately.
Add income to capital account or reduce capital account by loss as there is no retained earnings line in proseries (partnership tax return)

Am I doing it right?

Thanks!

[Snaggletooth]

Correct

I believe this is the GAAP-preferred presentation for Partnership and Proprietorship balance sheets.

Profits, Losses, Retained Earnings, "Earned Surplus" (if you will), Excess Capital, all DO exist in these entities, and I believe these same structures should be observed because profits, distributions, contributions, etc. must be tracked. However, for Financial Statement presentation, I believe all of these are condensed into a single account for partner's capital balances.

Furthermore, the balances must be in proportion to the partnership agreement even if each partner has a different basis. I realize this goes beyond your question, but I have found this treatment confusing to clients and even other preparers. There is a good discussion about tracking these differences in TTB Business Edition for Partnerships and S Corps.