Our foreign partnership keeps local books in euros. Does Form 8865 Schedule L really need U.S.-GAAP-style balance sheets translated into dollars?
I am a U.S. Category 1 filer for a foreign partnership based in Spain. The partnership's accounting system is local, in euros, and the year-end books do not look like a U.S. tax balance sheet package. We can prepare a translation, but it will take time and I want to know whether Schedule L actually requires that level of conversion.
Some advisers speak as if local books are enough so long as the major line items tie out. Others say the IRS instructions specifically require Schedule L to be prepared and translated into U.S. dollars in accordance with U.S. GAAP. I want to know which rule actually controls here.
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