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Discussion:Proseries - Losses limited to basis
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Discussion Forum Index --> Tax Questions --> Proseries - Losses limited to basis
SunGod (talk|edits) said:
| 15 February 2007
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| A sole stockholder of an S-Corp has stock basis of $500 and a debt basis of $1,000. The S-Corp had a business loss of $20,000. After all the required information is entered in ProSeries (Professional Edition), the K-1 shows a loss of $20k in line 1. The basis worksheet shows that the losses are allowed up to $1,500; with the remaining $18,500 to be carried over to next year. Shouldn't line 1 in K-1 be $1,500 (limited to basis)? What am I missing? Thanks for any assistance.
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Deback (talk|edits) said:
| February 15, 2007
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| Line 1 of the K-1 is the actual S-Corp loss, which is $20,000. The balance that is not deductible is carried forward by your program in the sustained losses section. It doesn't sound like you're missing anything.
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JR1 (talk|edits) said:
| February 15, 2007
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| Isn't the basis computation made on the personal return? So you'd check the box on the K1 worksheet that there's at risk limitations.
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Kevinh5 (talk|edits) said:
| 15 February 2007
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| the thread title makes it sound like if you used different software you would get a different answer. You don't.
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Death&Taxes (talk|edits) said:
| 15 February 2007
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| Exactly, JR. I've received 3rd party K-1s with notes attached by the professionals telling me the loss is limited and giving a computation of basis.
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SunGod (talk|edits) said:
| 15 February 2007
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| I filled in the information in the Form 6198 (at risk limitations) worksheet in the stockholder's personal tax return (1040), and the loss allowable is still $20k. What gives?
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Kevinh5 (talk|edits) said:
| 15 February 2007
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| you are looking at the loss allowable on the 1040 and not the amount to be reported on the K-1, correct?
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Blrgcpa (talk|edits) said:
| 15 February 2007
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| The K-1 tells you the actual income and loss of the business. If you go to the basis statement in the 1120s part of the program and print it out, it will give you the basis and amount that is allowed to be deducted on the 1040. The balance gets carried forward until used up.
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Death&Taxes (talk|edits) said:
| 15 February 2007
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| Did you check on the K-1 worksheet that some amount is not at risk?
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SunGod (talk|edits) said:
| 15 February 2007
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| D&T - your response solved the problem. I had to check the box that some amount is NOT at risk. The losses allowed flowed through correctly in Form 1040. Thanks a million!! I was going in circles with this one.
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JR1 (talk|edits) said:
| February 15, 2007
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| Ahem. Careful readers would note the third post above....*whistling*
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Chase (talk|edits) said:
| 26 February 2008
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| This post was extremely helpful to me today -- once again, kudos to the everyone who contributed to this thread and many others.
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Kevinh5 (talk|edits) said:
| 26 February 2008
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| Thank YOU Chase, for using the search feature!!!! I can't tell you how many questions I have NOT had to ask because I can search. I'd bet that all of the regular contributors look things up just to make sure, they don't all know everything.
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