Follow these instructions to enter the $$$$ shown as Code AJ through ZZ on box 17 of the #### S Corporation Schedule K-1

[VictorJD]

1. Read the instructions included with your K-1

2. In the Search field in the toolbar at the top of the screen, enter the specific topic included in your K-1 instructions.

3. Select the topic that best matches your K-1 instructions. We'll guide you through the rest.

In my case, the instructions on K-1 from our accounting firm are: " See IRS Schedule K-1 instructions" which is not helpful.

This is for Aggregate Business Activity Deduction.

Anyone know what to do at this point?

This is for Excess Business Loss Limitation.

Thank you,

-Victor

[VictorJD]

I found this post from last year in TurboTax by searching for Form 461 Excess Business Loss:

Form 461 is missing, no line of questioning to alert to this problem

by drkuzin•Updated over 1 year ago

I was made aware after I had filed my taxes that TurboTax does not appear to support form 461 (limitation on business losses).  This was suspended for 2018-2020, but is back in force for 2021.  There is no line of questioning during the interview process that alerts that there could be a problem.  This is also not listed anywhere that I could find, that this form is not supported - see

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-forms/irs-forms-included-turbotax/L5...

I called into customer service and was told that this form is not supported and that I would have to file an amended return by paper.  I have always been impressed at how thorough turbotax normally is, but this has made me lose some faith.  What else is out there that is not supported that I have mistakenly allowed through?  Does TurboTax refund you if you are unable to complete taxes using their software?

As best as I can tell the best way to fix this would be to manually enter the amount on form L8 (other income statements) so that it will show up on line 8o on Schedule 1 and then print out my amended return with a copy of form 461 attached.  It looks like, since I can't use losses above the threshold amount of $524,000 (married filing jointly), that I will have to manually keep track of NOL for future tax returns, since turbotax doesn't seem to track NOL either.  I realize that NOL is a somewhat more complicated issue, but only realized this after filing because nothing is really mentioned about it during the questioning process.

If anyone has a better suggestion, I would love to hear other's opinions.  I also read that the professional version of TurboTax for accountants, also does not include form 461 this year.

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Best Answer

by tagteam

 wrote:

I also read that the professional version of TurboTax for accountants, also does not include form 461 this year.

No, they do not and I believe your outline re how to handle this scenario is as good as any. 

Hopefully, they will support the form for the 2022 tax year.

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[PatriciaV]

The IRS made extensive changes to the coding on Schedule K-1. Instructions for prior years are unlikely to apply. But, no, TurboTax does not support Form 461 for Excess Business Losses.

If you have already entered Schedule K-1 with Box 20 Code AJ, we recommend deleting that K-1 and proceeds as follows:

If you follow the steps below, the information from Schedule K-1 Box 20 Code AJ will appear on an Additional Information worksheet as part of your return. How you use this information is left for you to determine and enter as appropriate. Note that Code AJ is for Excess Business Losses, which would be used only if your net losses from all businesses are more than $289,000 ($578,000 if filing a joint return). If this doesn't apply to your tax situation, you may completely omit the following entries.

1. Working through the Schedule K-1 entry screens, check the box for Box 20.
2. Continue to the page to Enter Box 20 Info.
3. Choose AJ - Excess business loss limitation from the drop down.
4. Do not enter an amount here.
5. Continue to the page to Enter Box 20 Other Information Amounts.
6. In the section under "Other Description", enter the Supplemental Information provided with your K-1. Choose relevant descriptions then enter the amount for each line.
7. Continue to back to the K-1 Summary page.

You can review the result using Forms Mode in TurboTax for Desktop.

1. Find K-1 Partner [name of K-1] in the forms list on the left.
2. Click on K1P Addl Info 1 under that form to open it in the large window,
3. Scroll to the bottom of the form to Code AH to ZZ: Other Information.
4. Confirm that your entries for Box 20 Code AJ appear on Line 6.
5. Click Step-by-Step to return to the main screens.

@VictorJD 

[BillF1]

I suggest that you download Form 461 from IRS.Gov, fill it out, save it, and then enter the amount of the total on Line 16 of Form 461 as directed on the Form 461 i.e. enter the amount on Line 8p on Schedule 1.