Form 7203 Now Required in 2023; OK if Not Filed Prior to 2023; Quickbooks Functionality Limited for Thsi

[derhawk]

I am the sole owner of an S-Corp in business since 2020. I've used Turbotax Small Business to file corporate taxes and issue the K-1. I've used Turbotax Online personal to do personal taxes. This is the first year that Turbotax Online personal has prompted me to complete a 7203. In 2023 and prior years the company made a non-dividend distribution. If I am interpreting what I've read in other posts in this form correctly, then:

1. That I have not filed a 7203 in prior years is not a problem, but I need to file it for 2023.

2. Quickbooks is essentially worthless with regard to this form, simply providing a blank form to complete (which one could do with the IRS pdf, miserable product functionality if so)

3. I need to create a 7203 for each year my business has existed for my own records and for a starting point for the 2023 filing.

Am I correct with all 3 of the above?

[Mike9241]

2021 was the first year required but there were exceptions.

Who Must File
Form 7203 is filed by S corporation
shareholders who:
• Are claiming a deduction for their
share of an aggregate loss from an S
corporation (including an aggregate
loss not allowed last year because of
basis limitations),
• Received a non-dividend
distribution from an S corporation,
• Disposed of stock in an S
corporation (whether or not gain is
recognized), or
• Received a loan repayment from an
S corporation.

[derhawk]

My company had a non-dividend distribution in 2021, 2022, and 2023, which is on the K-1 in those years, but 2023 is the first year TT has prompted me to file a 7203. Did TT miss this? Should I then also complete and send in a 7203 for 2021 and 2022 now.

[Rick19744 · Accepted solution]

Here are my thoughts on this:

• Based on your facts, you should have in fact completed form 7203 for tax years 2021 and 2022 since you received a non-dividend distribution.
• Form 7203 was created by the IRS to have a uniform schedule for maintaining shareholder stock / debt basis.
• As long as you did not take losses in excess of your stock basis, then I would not "amend" your tax return just to add that form.
• What I would recommend is that you do in fact complete a form 7203 for each year and have it available in case it is requested by the IRS; at this point it is already completed, you make a copy, send it in, and indicate since it is a new form you just overlooked it.  This is all on the premise that you did not take losses in excess of your stock basis.
• After completing for form 7203 for 2021 and 2022, you now have an accurate beginning stock basis for Part 1 line 1 for 2023.