Question

K-1 incorrect loss on Schedule E (again)

Forum|Forum|2 years ago
March 23, 2024
1 reply
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I have a loss on line 1 of my K1-S Corp. Let's call it -X. My stock basis is zero. Line 35c of Form 7203 (allowable loss from stock basis) correctly shows the allowable loss amount, lets call it 0. However, Schedule E, p2 has the full loss from line 1 of my K-1 on line 28i which then transfers to Schedule 1 as negative income.

I asked a similar question last year, and the method that worked was to adjust this on the At Risk Wks -S for the S-Corp. In this years 2023 version, there is no At Risk Wks-S for the S-Corp. I tried overriding it on Schedule E, p2 but that will not allow for electronic filing.

Where is the correct place in Turbo Tax 2023 to deal with this?

Thanks,

Doc

A

AmeliesUncle

TurboTax is not set up to limit losses due to Basis.

You need to manually limit it by only enter the allowable amounts on the K-1 (if you Basis is zero, then all numbers on what you enter for the K-1 would be zero).

Then you manually keep track of the unallowed Basis. At whatever year in the future it is allowed, you will enter a second K-1 called "PYA" and enter the amounts of the then-allowed loss.

D

Doc99Author

That seems a bit opaque and I try not to change what is reported on the K-1 that was provided by the S-Corp. It would work, but I'd hope there would be a better way to handle it.