S Corp allowed loss

Forum|Forum|3 years ago
March 8, 2023
1 reply
23 views

My S Corp shareholder has a prior year loss carry forward (12K). This year there is an allowable loss of $2000 due to increased basis from contributions and a profitable year. The allowable loss on the basis worksheet is not carrying to the K1. The K1 only shows the current year income.

ProSeries Professional

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Best answer by TaxGuyBill

Yeah, Intuit is severely negligent with Basis limitations in ProSeries.

Enter a second K-1 for the corporation, but rather than entering the corporation name, title it as "PYA". And enter the allowable loss on that.

https://www.irs.gov/instructions/i1040se#en_US_2022_publink24332td0e1875

T

TaxGuyBillAnswer

Level 15

Yeah, Intuit is severely negligent with Basis limitations in ProSeries.

Enter a second K-1 for the corporation, but rather than entering the corporation name, title it as "PYA". And enter the allowable loss on that.

https://www.irs.gov/instructions/i1040se#en_US_2022_publink24332td0e1875

A

Asia11Author

Level 3

When you say enter a second K1, are you talking about doing that on the 1120S return which would produce a K1 titled PYA or a mythical K1 that doesn't actually exist that you enter on the 1040? The instructions you provided are for the 1040 but I'm working on an 1120S... Just want to clarify.

Thank you!

Losses Not Allowed in Prior Years Due to the Basis or At-Risk Rules

Enter your total prior year unallowed losses that are now deductible on a separate line in column (i) of line 28. Do not combine these losses with, or net them against, any current year amounts from the partnership or S corporation.
Enter “PYA” in column (a) of the same line.

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TaxGuyBill

Level 15

On the 1040. Basis limits are on the 1040, not on the 1120-S.

The prior year unallowed loss should still have been showing on that K-1, but it would have been disallowed on the 1040 due to Basis.

Losses Not Allowed in Prior Years Due to the Basis or At-Risk Rules

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