S-Corp Loss - Basis Limitations on 1040

[troy]

Working on a 1040 return, and imported the K-1 which has a $60k loss. The loss should roll forward as it is not allowed in the current year due to basis limitations.

The software is not handling correctly and it is allowing a loss in the current year.

What is the best way to handle so that:

1. The loss is not allowed

2. It is rolled forward and tracked properly in the software moving forward

[dascpa]

Is Some Investment Not At Risk checked off?

Is 6198 filled out?

If S corp is 7203 filled out?

[TaxGuyBill]

ProSeries does not limit due to Basis.  You need to manually do it.

Only enter the allowable loss on the K-1 worksheet.  Then manually change the 7203 to reflect the full loss that is on the actual K-1.

Next year (or whenever Basis is restored), enter a second K-1 worksheet called "PYA" to enter the then-allowable losses.  And manually change the 7203 to not reflect this second K-1.

It won't automatically roll over, so you need to keep track of it some other way.  Maybe a "note" in the program, or open up the line-worksheet to show some information.  Or a post-it note if you have paper-files.

[TaxGuyBill]

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@dascpa wrote:

Is Some Investment Not At Risk checked off?

Is 6198 filled out?

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Those do not apply for Basis limits, although they may be able to be used as worksheets to help figure out the correct amounts.