How to resolve ProConnect Tax diagnostic ref. 10700

If you're receiving the following Diagnostic:

• S-Corporation # {PrefixNum} : AMT prior year basis loss carryovers have not been entered. The program will assume the AMT basis carryovers are zero and compute a corresponding AMT difference.

This diagnostic appears when Alternative Minimum Tax (AMT) prior-year basis loss carryovers have not been entered for a shareholder in an S-Corporation return. Without this entry, ProConnect Tax assumes the AMT basis carryover is zero, which may overstate AMT income and trigger discrepancies between regular tax and AMT.

Follow these steps to resolve:

1. Go to Input Return ⮕ Shareholder's Basis (7203)
2. Select the affected Shareholder's tab.
3. Scroll down to Basis Carryovers.
4. In the Ordinary Loss field, enter the amount of prior year AMT basis loss carryover. If there is no carryover, enter 0.
5. Recalculate the return and the diagnostic will now be cleared.