Thanks Mike! There was $2,300 in distributions, which I did enter.
I sat down with the accountant today who issued the k1. He also issued the 7203.
His explanation was that the income earned on the k1 from the sale of business assets was offset by my basis in those assets. (Ie- I had bought the assets when the business was founded nine years ago, and reinvested distributions back in the company which I already paid tax on as one of several investors, and that's my remaining basis). The business assets were liquidated for less than my basis in the company, which is why it's a net loss, but on my k1 I have long term sale income from those assets.
The accountant explained, which makes sense based on tax law, how the basis I had in the company would offset the sale of those assets.
However even though TurboTax did give me the opportunity to fill out the 7203 and I filled out the k1 fields, the basis is not offsetting the gain and I can't figure out where it is supposed to be. I can schedule another meeting with the accountant, but since he claimed it was an issue with how "TurboTax handles basis" I might get help here.
If an scorp sells assets (ie asset sale), am I getting incorrect advice on how my asset basis is supposed to flow through? It certainly doesn't make sense for me to be paying tax on that all as income and not getting credit for years of nondistributed phantom income and asset basis? I've never actually received a distribution, although I have received "distributions" that were reinvested, and I've paid tax on those distributions already that are tracked as basis.
