My S-Corp showed a loss, but Turbotax won't accept a negative value on Line 3a of my Schedule K1.

Forum|Forum|3 months ago
April 15, 2026
1 reply
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S-Corp had 0 revenue, but incurred basic expenses such as maintaining insurance and payroll software, showing a small loss. To my knowledge I submitted a correct 1120S to the IRS and completed Schedule K-1 based on that info, but Turbotax won't accept a negative number from K-1 on Line 3A of Form 7203. It's showing error message: "Line 3a shouldn't be less than zero."

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AmeliesUncle

Level 15

Are you manually filling out the 7203? Or is TurboTax doing it automatically?

If you are manually filling it out, have you read what line 3a says on the actual 7203?

https://www.irs.gov/pub/irs-pdf/f7203.pdf

zambeniniAuthor

Level 2

Thank you for writing, yes, I am filling out manually and discovered this as well, but even when 3a (income) is marked "0" and the loss only shows on Part III, per the form, I'm getting an error from Turbotax. It says: Line 3a cannot have a gain in Part I and a loss in Part III. It's clearly marked zero.

Then there's a subsequent error message when I advance to the next screen: "Person on the Retun Worksheet: Enrollmentstatus must be entered". (Those typos are in the turbotax software. I think they didn't put their best foot forward on this section).

Anyway, thanks a million for answering. Penny for you additional thoughts?

AmeliesUncle

Level 15

@zambenini wrote:
It's clearly marked zero.

"Person on the Retun Worksheet: Enrollmentstatus must be entered".

Have you tried leaving it blank, rather than zero?

I haven't seen the second one, but I Googled it and it seems to be related to a student. Did you claim a college education credit? If so, I suspect that could be it. If you are manually filling in the forms, when you are in "Forms Mode", I think there is a red mark next to the worksheet that has the error (at least it used to; I haven't used it in several years).