Expert: John Kirk, CPA Date: 8/7/2008 Subject: Ordinary Income and Net Income
Question Should ordinary income (reported on line 21 of 1120S) link to net income? For example if my 2007 1120S reports ordinary income of $35K and I run a balance sheet report with an as of date of 12/31/2007 should the net income also be $35K?
Thank you.
Answer Not necessarially, The net income per books is often different than taxable income which is reported to you on schedule k-1. On form 1120S there is a reconciliation on page 4 that compares net income per books to net taxable income.
