Hello,

I am preparing a Form 7203 as part of an individual tax return. The taxpayer received a Schedule K-1 from an S corporation, and I want to confirm whether I may have missed any inputs, as Part III (Shareholder Allowable Loss and Deduction Items) of Form 7203 is showing as blank.

Here are the relevant details from the Schedule K-1:

• Box 1 (Ordinary Business Income): $250,000

• Box 13 (Credits): $5,000

• Box 16:

  • Code D:$200,000

  • Code C (Other Nondeductible Expenses): $5,200, which includes:

    • $200 for meals

    • $5,000 for Form 8846 – Credit for Employer Taxes Paid on Tips

My question is: Should Part III of Form 7203 be blank for this K-1? I expected to see $5,138 in Column (a) of Part III, but ProConnect is not populating this number. Could you please help me understand whether this is correct or if I need to input something manually?

Thank you very much for your guidance!