As an S-Corp member, I must file Form 7203. While TurboTax Deluxe Desktop tells me I need to fill out the form and opens a mini window for me to enter the information, most of what is on that form comes directly from the Schedule K-1 (Form 1120-S) that I entered, but I have to enter it again and TT doesn't validate that what I put into the 7203 matches what's on the K-1. To make matters worse, Line 8a of form 7203 is protected because the value is pulled from another place, but it is not pulling from where the IRS says it should. According to the IRS Instructions for Form 7203, Line 8a should come from Schedule K-1 (Form 1120-S), box 16, code C. However, TurboTax Deluxe Desktop does NOT use this number from the K-1. After much research online, I realized that I had to either override that field or put the number into Line B, Nondeductible expenses of the "Stock and Debt Basis Limitations Smart Worksheet" and it will get pulled into Line 8a.
Anyway, will TurboTax ever support automatic completion of this form? It seems pretty straightforward to me.
Sorry for the rant,
Rich
Form 7203 is included in TurboTax for the taxpayer to complete, based on historical transactions for their investment. You may need to adjust your K-1 entries to populate this form appropriately. There are no current ongoing investigations or upgrades planned that would affect Form 7203 during this tax season.
Thanks. I'm not concerned about this tax year, but I'm hoping this could be updated for a future tax year. I understand that some adjustments may need to be made, but why not pull what can be pulled from the K-1 automatically and let the user add/adjust the remaining items. Per the IRS Instructions, Part I lines 3a through 3m and 8a and most of Part III column (a) come directly from the K-1. It would just be nice if TurboTax pulled these automatically to prevent user error when entering them.
Thanks,
Rich
Thank you, Rich. I am also having trouble with form 7203, line 8a. Where do I find the "Stock and Debt Basis Limitations Smart Worksheet" you mentioned?
I'm sorry, Patricia, but your response to this question was no help. You said : "You may need to adjust your K-1 entries to populate this form appropriately." How do we do that, by trial and error?
Rich mentioned we should enter the information that is to be imported into line 8a in the "Stock and Debt Basis Limitations Smart Worksheet." Where do I find this worksheet? I am using the desktop version of TurboTax.
Thank you.
Rick
Rick,
The Stock and Debt Basis Limitations Smart Worksheet is part of Form 7203 in TurboTax. Just go to View Forms and you should see Form 7203 in the form list under your K-1. Open it up and you will see the worksheet in the middle of the form. Line B of the worksheet is where you want to put these Nondeductible expenses.
Thanks for the graphic - really helpful.
Can't believe TurboTax doesn't pull this automatically and/or doesn't tell you to enter into this worksheet value.
Thank you SO MUCH for posting this. I had the exact same issue and trouble. I was with a live expert for about 20 minutes without any success. In the end my search came up with your post on how to get the correct information into line 8.a. This information is important (assuming not $0) because otherwise your reported stock basis at the end of the tax year will not be correct and could get flagged the following year.
Again, a big thank you to @richlux