The following diagnostic is generating: The program detected shareholder debt basis related input without a corresponding type of debt. For each debt, an entry is required in "Type of Debt. My question is if the client is unable to take the loss due to passive loss limitations, is this form required? I am getting a critical diagnostic. However according to the instructions to the 7203 this form is required when a shareholder is claiming a loss. This year and other years losses were suspended by the passive loss rules. Also do suspended passive losses reduce basis?