Befuddled
Level 1
02-04-2021
02:05 PM
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Client has zero basis since buying out other shareholders in 1120S years ago. Never a concern as profit until 2020. 2020 loss needs to be suspended. Attempting to locate Part II of form 6198 in some form of entry worksheet for the 1040 to suspend the loss for 2020. Cannot locate.
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TaxGuyBill
Level 15
02-04-2021
02:15 PM
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I know a lot of ProSeries users may use 6198 to when there is a Basis limitation, but that is NOT how it is supposed to be done. Form 6198 is not meant for Basis limitations.
You are only supposed to enter the amount of the loss that is allowed on the K-1. Then you calculate the unused amount to MANUALLY enter in future returns when it can be used.
