Intercompany loan reconciliation

Related-party loan balances have to foot across the partnership entities before the next return can be filed. The memos only carry the highlights, and eyeballing Schedule L across a stack of returns is exactly the kind of task that quietly hides a mistake.

How it works

The script reads each entity's filed Form 1065 PDF with pdfplumber in layout mode, so the Schedule L columns stay aligned, and pulls the only two related-party lines that matter: loans to partners and loans from partners. A full-text scan confirms nothing else is hiding elsewhere (no stray due-to/from, notes-receivable, or affiliate items). It foots beginning-of-year against the prior year's end-of-year on every loan line, so a blank is provably a real zero and not a missed number.

• These are entity-to-partner loans, not sister-entity loans, so they are not expected to net to zero across the portfolio. Worth knowing before chasing a phantom imbalance.
• One entity is a disregarded single-member LLC with no Schedule L, so it is correctly excluded.
• Ownership is cross-checked from each K-1 so the percentages foot to 100%.

It runs against the source PDFs and writes a working paper into the vault, ready as an input to the next filing. Re-running it on a new year is just dropping in the new returns.

The filed return is the most authoritative version of these numbers, so I read it directly instead of re-keying from a memo. The agent does the extraction and the footing. I review a reconciliation, not a pile of PDFs. That is the tax-director seat, done in an afternoon.