Solved

Form 7203 Now Required in 2023; OK if Not Filed Prior to 2023; Quickbooks Functionality Limited for Thsi

Forum|Forum|2 years ago
March 6, 2024
2 replies
0 views

I am the sole owner of an S-Corp in business since 2020. I've used Turbotax Small Business to file corporate taxes and issue the K-1. I've used Turbotax Online personal to do personal taxes. This is the first year that Turbotax Online personal has prompted me to complete a 7203. In 2023 and prior years the company made a non-dividend distribution. If I am interpreting what I've read in other posts in this form correctly, then:

1. That I have not filed a 7203 in prior years is not a problem, but I need to file it for 2023.

2. Quickbooks is essentially worthless with regard to this form, simply providing a blank form to complete (which one could do with the IRS pdf, miserable product functionality if so)

3. I need to create a 7203 for each year my business has existed for my own records and for a starting point for the 2023 filing.

Am I correct with all 3 of the above?

TurboTax PLUS Online

Best answer by Rick19744

Here are my thoughts on this:

Based on your facts, you should have in fact completed form 7203 for tax years 2021 and 2022 since you received a non-dividend distribution.
Form 7203 was created by the IRS to have a uniform schedule for maintaining shareholder stock / debt basis.
As long as you did not take losses in excess of your stock basis, then I would not "amend" your tax return just to add that form.
What I would recommend is that you do in fact complete a form 7203 for each year and have it available in case it is requested by the IRS; at this point it is already completed, you make a copy, send it in, and indicate since it is a new form you just overlooked it. This is all on the premise that you did not take losses in excess of your stock basis.
After completing for form 7203 for 2021 and 2022, you now have an accurate beginning stock basis for Part 1 line 1 for 2023.

M

Mike9241

2021 was the first year required but there were exceptions.

Who Must File
Form 7203 is filed by S corporation
shareholders who:
• Are claiming a deduction for their
share of an aggregate loss from an S
corporation (including an aggregate
loss not allowed last year because of
basis limitations),
• Received a non-dividend
distribution from an S corporation,
• Disposed of stock in an S
corporation (whether or not gain is
recognized), or
• Received a loan repayment from an
S corporation.

D

derhawkAuthor

My company had a non-dividend distribution in 2021, 2022, and 2023, which is on the K-1 in those years, but 2023 is the first year TT has prompted me to file a 7203. Did TT miss this? Should I then also complete and send in a 7203 for 2021 and 2022 now.

Rick19744Answer

Here are my thoughts on this:

Based on your facts, you should have in fact completed form 7203 for tax years 2021 and 2022 since you received a non-dividend distribution.
Form 7203 was created by the IRS to have a uniform schedule for maintaining shareholder stock / debt basis.
As long as you did not take losses in excess of your stock basis, then I would not "amend" your tax return just to add that form.
What I would recommend is that you do in fact complete a form 7203 for each year and have it available in case it is requested by the IRS; at this point it is already completed, you make a copy, send it in, and indicate since it is a new form you just overlooked it. This is all on the premise that you did not take losses in excess of your stock basis.
After completing for form 7203 for 2021 and 2022, you now have an accurate beginning stock basis for Part 1 line 1 for 2023.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.