This program unlocks the key issues in analyzing business tax returns by creating a business tax return from a conventional financial statement. This shows the major formatting differences and ways balance sheet accounts and income statement items are labeled differently in a tax return. It also reveals the functions of the various schedules. By using a pass-through entity, we further see how the tax return carefully segregates items that move to an owner’s personal tax return via the Schedule K-1. A final step is creating a chart that “maps” a financial statement to both pass-through entities and a regular corporation.
This program unlocks the key issues in analyzing business tax returns by creating a business tax return from a conventional financial statement. This shows the major formatting differences and ways balance sheet accounts and income statement items are labeled differently in a tax return. It also reveals the functions of the various schedules. By using a pass-through entity, we further see how the tax return carefully segregates items that move to an owner’s personal tax return via the Schedule K-1. A final step is creating a chart that “maps” a financial statement to both pass-through entities and a regular corporation.

After this seminar, attendees will be able to:

• For an example business (case), construct a tax return balance sheet (Schedule L), income statement, Schedule M-1 and Schedule M-2 on the cash basis
• Identify key formatting differences between a conventional financial statement and a tax return
• Describe how pass-through entity tax returns separate various income statement items for purposes of allocating them to the owner(s) personal tax returns
– On the Schedule K-1, identify the pass-through items that involve cash, compared to pass-through items that do not involve cash
– Describe the common relationship between pass-through income and distributions to the owner(s)
– Create a chart to compare and align financial statement components to the appropriate tax return schedules