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The purpose of this article is to help you prepare Form 1120S, Page 1, Item F, which asks you to report the total assets of your corporation. Read on to find out whether or not your corporation is required to show an amount in this field, and if so, where to get that number.
Item F Reporting Requirements. Here's some potentially good news for smaller businesses: If the corporation's total receipts and its total assets are both less than $250,000, the corporation is not required to put an amount in the Item F field.
Here's the reason why: corporations with receipts and assets under $250,000 are also not required to complete Schedule L or Schedule M-1, both of which are found on Page 4 of Form 1120S. Schedule L is the Balance Sheet, which is a financial report that lists the assets, liabilities and shareholder equity of the corporation. So, if you don't have to prepare the Balance Sheet (which includes the total asset amount), then you also don't have to show that total asset amount on Page 1, Item F.
Of course, just the opposite is also true: if your corporation's receipts and assets are greater than $250,000, Schedules L and M-1 must be completed, and the total asset amount gets reported in Item F. If that's the case, the Item F amount should be the same as the amount on Schedule L, Line 15, Column (d), which is the total asset line from the Balance Sheet.
A Word of Warning. Now that you know the requirements for Item F, please give this suggestion some serious consideration: Most smaller corporations will not be required to prepare a Balance Sheet for the corporate tax return; nor will those smaller corporations be required to put a number in Item F. But there is good reason for you to do a Balance Sheet anyway, even if you don't show the numbers on the return.
What is the purpose of a Balance Sheet? It serves a critical function in the life of any business by providing a snapshot of the corporation's financial condition at any given point in time. It lists the assets and liabilities of the company. Shouldn't every business know how much it owns and how much it owes? Absolutely. So please don't let the Form 1120S filing requirements stop you from keeping a complete set of books. The success of your business depends on knowing the numbers, regardless of how big or small they may be.
