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An amount of loss is entered as a federal At Risk Carryover for an S corporation. An entry of -1 should be entered in the corresponding state if different At Risk Carryover code in order to prevent the NJ return from reporting any prior year loss amounts. NJ tax law prohibits any carryover of losses, including At Risk carryover amounts.

Solution: To resolve the diagnostic for an S Corporation K-1:

1) Go to Screen 20, Passthrough K-1's.
2) Select S Corporation Information.
3) Scroll to the At Risk Carryovers section.
4) On the line Ordinary Loss, go to the second column and enter a -1 on this line for NJ (code 703).

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