Looking for guidance on completing an initial year form 7203.
Client began business in 2022 as a SMLLC, filing schedule C (QBO was used for bookkeeping, so we had a complete balance sheet & P&L). We made the S-election on 1/1/2023 and are now filing the 1120-S for 2023. Client had very "simple" years in both 2022 & 2023, and the only items affecting basis were draws & net profits.
In a case like this, my assumption is that I would put $0 on line 1 of the 7203, and then put his 2022 ending equity on line 3m (other items that increase stock basis), so that line 15 equals our 2023 ending equity?
If I'm wrong, I'd appreciate your feedback
Client began business in 2022 as a SMLLC, filing schedule C (QBO was used for bookkeeping, so we had a complete balance sheet & P&L). We made the S-election on 1/1/2023 and are now filing the 1120-S for 2023. Client had very "simple" years in both 2022 & 2023, and the only items affecting basis were draws & net profits.
In a case like this, my assumption is that I would put $0 on line 1 of the 7203, and then put his 2022 ending equity on line 3m (other items that increase stock basis), so that line 15 equals our 2023 ending equity?
If I'm wrong, I'd appreciate your feedback
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