Thanks again for your helpful response. When I checked the box that said my investment was not at risk, the numbers did in fact propagate to the correct forms. Perhaps I didn't understand what at risk meant, since my entire investment was at risk, although my basis (my investment) was less than the capital in the S corp.
Unfortunately, I am now observing a different problem, in that the loss allowed according to form 6198 is different than the loss reported as allowed on form 7203. I can see exactly what is happening. I had a 250 nondeductible expense reported on my K1, and that carried through automatically onto form 6198. The worksheet for form 6198 did a pro-ration to determine what part of the ordinary loss was allowed, and what part of the "other deduction or loss" (which is really the nondeductible expense) was allow, and it then determine the sub of the allowed ordinary loss and the allowed "other deduction or loss", which turned out to be precisely my new basis.
But on the form 7203, the numbers did not carry directly by Turbotax, instead, I entered the numbers for my basis (capital contributions) , and I entered the $250 Nondeductible expenses (from line 16 of my K1) into the current year amount on line B of the Stock and Debt Basis Limitations Smart worksheet). I entered line 1 of my K1 (which technically had already been reduced by the 250). In this case the allowable total loss calculated was my basis less this $250.
The amount that was used to carry through to my schedule E was the larger loss (i.e. from form 6198). But, I am not certain if that is correct. Certainly to be conservative I would likely want to use the smaller loss (the one from form 7203).
I'm not really sure why these would be different, unless either Turbo tax is doing the calculations differently for the two forms (one correct, and the other incorrect), or perhaps the $250 I entered into the form 7203 worksheet as current year nondeductible expenses was not supposed to be entered there since it had already reduced to full loss on the schedule K1 that I received.
