1) Remove the form and not mail it with the 1040 and uncheck basis required on Sch E (since I think Form 7203 only has to be included if I take a loss or make a distribution - neither applies to me in my 2023 1120S)
the IRS has a copy of the 1120S and k-1 so it knows there was no loss or distributions reported.
this is from the IRS 7203 instructions
Who Must File
Form 7203 is filed by S corporation shareholders who:
• Are claiming a deduction for their share of an aggregate
loss from an S corporation (including an aggregate loss
not allowed last year because of basis limitations),
• Received a non-dividend distribution from an S
corporation,
• Disposed of stock in an S corporation (whether or not
gain is recognized), or
• Received a loan repayment from an S corporation.
It may be beneficial for shareholders to complete
and retain Form 7203 even for years it is not
required to be filed, as this will ensure their bases
are consistently maintained year after year
by the way except for beginning basis which would be pulled from prior year 7203, if present, nothing is pulled from the k-1 (deluxe desktop version - don't know about other versions)
I even tried this. Entered $0 distributions and $10,000 business income on k-1 but entered income of $25,000 and distributions of $20,000 on the 7203. in final review no errors popped up! thus it would seem you could make errors in entering the k-1 numbers in the 7203 without a flag being raised
