ProSeries needs to add Form 461 (Limitation on Business Losses) to ProSeries. The Cares Act suspended Section 461 (Originally Part of the Tax Cuts and Jobs Act) due to the Pandemic for tax years 2018, 2019, and 2020 but is effective again for tax years beginning after 2020 and before 2027 and per the 2021 Recommended Names and Descriptions of PDF Files Defined in MeF Publications, Web Pages and Business Rules (https://www.irs.gov/pub/irs-schema/ty2021-bmf-pdf-recommended-file-names-by-form-type.pdf) Form 461 can only be attached to a 2018 return.
Currently the Section 461(l) Excess Business Loss adjustment is reported on Schedule 1 Line 8 o (input is on Line 18 of the Other Income Statement).
However, there are NO warnings in the REVIEW about the need for Filing Form 461 with a business loss in excess of $262,000(single) or $524,000 (MFJ) flowing to Line 8 of the 1040 (from Line 3 or 5 of Schedule 1). In other words, unless you enter the excess amount on Line 18 of the Other Income Statement the entire loss will flow through to Line 8 of the Tax Return without limitation or warning that this needs to be checked.
There is also no calculation of the NOL carryforward of the limited amount (but we can't calculate it yet either because as of 02-14-2022 the IRS has not issued Publication 536 which is where you are directed to go to calculate the carryforward NOL from the Instructions in Form 461 (https://www.irs.gov/pub/irs-pdf/i461.pdf). Update (4-29-2022) Publication 536, now has the NOL calculation worksheet for Section/Form 461 on page 9 of the publication (https://www.irs.gov/pub/irs-pdf/p536.pdf). Now the question is how do you make this work in Proseries, when there is no “Worksheet 3” on the NOL Worksheet inside the ProSeries Software?
Finally, if we can't attach Form 461 to the return per 2021 Recommended Names and Descriptions of PDF Files Defined in MeF Publications, Web Pages and Business Rules, shouldn't there be a Review Error message that the Return can't be electronically filed (must be paper filed) because of the entry on Line 8 o of Schedule 1?
We are already going to be seriously delayed due to new K-2 and K-3 requirement, why not get Form 461 in an update as soon as possible. The issues of not having this form or appropriate review warning messages is going to cause a huge issue with prepares missing these new business loss limitations.
I have posted this information myself, but if I search Form 461, my post does not show up but it is in my post history. A ProSeries representative told me to keep posting it because they have no clue why it's not showing up in a search. Please go vote on my post, so maybe we can get ProSeries to notice this issue!
Add Form 461 (Limitation on Business Losses) to In... - Intuit Accountants Community
