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itsara3
New Member

Do I report all my S Corp business loss from my K-1 on my personal returns?

My wife and I purchased a business last September and established it as an S Corp.  We reported a loss for the year, however, I am not sure if I should report the entire loss on my personal returns given our tax basis.  We had a CPA complete the returns for the business and from the Schedule K-1, the loss is ($6,565), however, on the basis worksheet, it states the total allowed loss is ($5,546) with a loss to carryforward of ($1,019).  Should I report the allowed loss of ($5,546) on our personal returns as opposed to the total loss for the year?

6 Replies
ToddL
New Member

Do I report all my S Corp business loss from my K-1 on my personal returns?

You should report the Schedule K-1 exactly as it was prepared, to include any information about your basis. 

In order for an S-Corp shareholder to claim a loss, they need to demonstrate they have adequate stock and/or debt basis. See: IRS - S Corporation Stock and Debt Basis

It appears that your S-Corporation's loss exceeded your and your wife's basis in the S-Corp, and there are Basis Limitations for K-1 Losses


itsara3
New Member

Do I report all my S Corp business loss from my K-1 on my personal returns?

Thank you, the link to the IRS website definitely helped with my understanding of basis.  Your first sentence mentioned we should report the K-1 exactly as it was prepared, however, in the program when it asks for your business income or loss (what is in Box 1) it says not to put a loss amount that is more than your basis.  If I were to enter our allowed loss of ($5,546) in that section, it wouldn't match what is in Box 1 of our K-1, but apparently is the correct amount to enter based on our basis, is this okay?  I went through the rest of the K-1 section in TurboTax and didn't see anywhere to input basis calculation information, so I feel like if I enter our total loss of ($6,565) that would be incorrect because we are not allowed that entire loss for this tax year.
ToddL
New Member

Do I report all my S Corp business loss from my K-1 on my personal returns?

If the program did not ask for basis information, then only enter the loss amount up to your basis. Keep track of the "unused" loss to claim against future income of the S-Corp.
zeta
Level 2

Do I report all my S Corp business loss from my K-1 on my personal returns?

Just to add here that the next year, in order to add this loss you'd just need to simply follow Line 27 of these instructions: https://www.irs.gov/instructions/i1040se#idm[phone number removed]448

 

It took me a while to find this (how to claim the loss from a past schedule k1)

SRosenhan
New Member

Do I report all my S Corp business loss from my K-1 on my personal returns?

What do you enter for Box 17 V which asks for numbers from form 199A, including Ordinary Business income/loss -- must this number also be adjusted?   e.g. does it need to match what you entered in Box 1 or should it include the full loss amount? 

DaveF1006
Expert Alumni

Do I report all my S Corp business loss from my K-1 on my personal returns?

Usually when you record information for Box 17 V, all the information that is recorded in this section is all in the supplementary statements that came with your K1. You should not need to adjust or interpret anything. 

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