Hi Community, I need help resolving an issue with my 2024 return in TurboTax related to a closed S-Corp

[itsdhiraj]

Here’s the situation: • I closed the S-Corp in April 2023 (marked as “disposed, not sold” in TurboTax). • On Form 7203 from 2022, I had a carryover basis loss of $983. • In 2023, I had an actual loss of $1,235, which TurboTax correctly applied. • However, TurboTax is not applying the $983 carryover loss. It’s showing it as a carryover to next year — even though the business is now closed and this is the final year. • From my understanding, TurboTax should combine both the 2022 carryover and 2023 actual loss and allow me to deduct the full amount this year, as there won’t be a future opportunity to use the carryover. I’ve gone through the steps to mark the S-Corp as disposed. I’ve also entered the basis info on Form 7203. Still, the carryover remains. Question: 👉 How do I tell TurboTax to apply the carryover loss this year since the S-Corp has been disposed and will no longer exist? Any guidance or steps would be much appreciated. I want to ensure I’m not losing that $983 deduction just because of a software limitation.

[PatriciaV]

You may be able to enter this loss directly on the K-1 Partner Worksheet for your closed S-Corp using Forms Mode. 

If this is a suspended loss from a prior year, enter the amount as a negative number under Section A of the worksheet, Row 1(a) Column (b) and under Section B (AMT), Row 1(a) Column (b).

Note any red boxes on the worksheet, which will need to be corrected in order to file your return. Click the Errors icon above the list of form in your return to open a message box under the open form. TurboTax will display the issue and a possible solution.