S corp shareholder basis calculation

[Joyce2019tax]

Schedule E page 2, per the form instructions, if an individual reports a loss, receives a distribution, disposes of stock, or receives a loan repayment from an S Corporation, they must check the new box and attach a copy of their stock basis computation. 

I could not find the stock basis from turbo tax business . Could anyone please let me know where I can find this worksheet?

Thank you!

[Anonymous_]

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@Joyce2019tax wrote:

I could not find the stock basis from turbo tax business . Could anyone please let me know where I can find this worksheet?

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TurboTax does not actually track your basis in the S corporation; you need to calculate that outside of the program. There is a worksheet in the K-1 instructions. 

See https://www.irs.gov/instructions/i1120ssk#idm140155513239760

[Joyce2019tax]

Turbo did not require me to attached the basis calculation even though I already input my K-1 with code 16 (receives a loan repayment from an S Corporation). Do I still need to attach it to 1040 and how to do it if I efile?

Thanks.

[Anonymous_]

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@Joyce2019tax wrote:

Do I still need to attach it to 1040.....?

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Not necessarily, the instructions are as follows.

If you are claiming a deduction for your share of an aggregate loss, check the box on the appropriate line in Part II, column (e), and attach to your return a computation of the adjusted basis of your corporate stock and of any debt the corporation owes you.

[ojedainspections]

Actually turbo tax will give this information if you enable the forms in the form section.  For the numbers to be correct you need to go back to the beginning of the company and account for how much money you put in, loans, etc.  Once you go through the whole process looking at the IRS explanation turbo tax will make your life so much easier because those instructions on the IRS website are very hard to follow.  Now that information is updated automatically when I do each years' taxes.  You have to know your basis in the company if there is ever a loss you want to get credit for. 

[Joanna1898]

How do you attach the Basis calculation when you e-File?

[Joanna1898]

To clarify my question:  I need to attach a basis calculation to my Form 1040 per instructions on Schedule E, Part II, line 28.  How do I do this if I E-File using Turbo Tax? 

[ThomasM125]

There is no way to attach the schedule. The best thing to do is mail the return and attach the schedule manually. An alternative course of action is to e-file the return and wait to see if the IRS requests the schedule, at which time you can mail it in response to their request.

[Joanna1898]

Thank you so much for your prompt answer.  I can't believe Turbo Tax doesn't fulfill this IRS requirement.  By the time I paid to upgrade from Deluxe to Premier and then purchase Audit Protection on top of that, I'm getting pretty close to what it would cost to hire a professional.  Deluxe didn't handle my K-1s so I had to upgrade to Premier and now Premier doesn't handle a pretty basic IRS requirement.  In other words I can only E-File an incomplete return.  Not very professional!

[Gurk]

How can you get TT to generate a basis statement for an S Corporation stockholder?

[Anonymous_]

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@Gurk wrote:

How can you get TT to generate a basis statement for an S Corporation stockholder?

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That simply will not work; you cannot generate a statement within TurboTax. 

You can, however, use the worksheet at the link below as a template.

https://www.irs.gov/instructions/i1120ssk#idm139641012753504

[ojedainspections]

You have to enable the forms in the form section.  This is with the business version.

[ojedainspections]

Not true.  The business software does have this option.  You just have to enable the forms manually in the form section.  My first year using turbo tax I fed in info for each year starting back in 1999 with all the records, checks and tax records, enabled the forms and was able to establish the basis from the beginning.  After printing the forms I deleted the info and put the next years' info in and printed.  Saved my sanity because the IRS forms and explanations were way beyond me no matter how many times I read them.

[Anonymous_ · Accepted solution]

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@ojedainspections wrote:

Not true.  The business software does have this option.  You just have to enable the forms manually in the form section.  

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With respect to TurboTax Business, correct, but the fact remains that it has no utility for users who only have one of the personal income tax preparation products (which is mostly discussed in this thread).

Further, there is no way to attach that Worksheet to an individual return even if a user had both the business and personal edition.

[ojedainspections]

The subject heading of the question states S corp.  I wasn't aware you could file S Corp taxes with a personal version.  I'm being sarcastic.  Determining basis is huge for small companies who are trying to use turbo tax for tax reporting so to tell someone it isn't possible is doing a huge disservice to them.  

My husband always used a tax professional from the start of his company and not one of them advised him of the need to have this determined. Turbo tax made this so much easier once I realized the need of determining the need for it because of years with loss.