6609
S-Corporation # {ScorpNum} : The program detected an entry to allow losses before nondeductible and depletion expenses. For this treatment to be allowed, an election must be filed pursuant to IRS Regulation 1.1367-1(g). If this election was not already filed in a prior year, it can be triggered by selecting the applicable S-Corporation K-1 in the Elections input screen under "Elect to deduct shareholder losses before nondeductible and depletion expenses".
Can I efile with this informational diagnostic?
Solution: You can e-file with this diagnostic. This input is being generating from the input on Screen 20.2, S Corporation Information, Code 242. The program default (when losses are limited by the basis limits) is to allow nondeductible expenses and depletion first, then allow all other losses. By entering a "1" in this line Lacerte will allow other losses first, then allow nondeductible expenses and depletion. Enter a "2" to allow the losses prorata. The election itself can be made on Screen 46 Elections, Code 186.
