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Get your taxes done using TurboTax
I've been struggling with this same issue, and I think I've found out what's going on here. IRS doesn't have great guidance on form 7203, and nothing relating to Part I line 3g, but Tax Slayer does: https://support.taxslayerpro.com/hc/en-us/articles/[phone number removed]6-IRS-Form-7203-Form-lines-...
3g Net Capital Gains:
Sch K-1 Boxes 7, 8a, 8b, and 8c (if a net positive amount).
If negative it goes on Line 38(a). T
This is the same guidance the Turbo Tax gives.
Our accountant listed NET CAPITAL GAINS (form 7203 Part 1, line 3g) as same number as Net Long Term Capital Gains (K-1, line 8a), but according to Tax Slayer (and Turbo Tax) this is supposed to be a NET Calculation of:
Net SHORT Term Capital Gain (loss) (K-1, line 7)
+ Net LONG Term Capital Gain (loss) (K-1, line 8a)
+ Collectibles (28%) gain (loss) (K-1, line 8b)
+ Unrecaptured sec 1250 gain (K-1, line 8c)
and the K-1 Part III, line 38 is NET CAPITAL LOSS (i.e. same calculation as above, if negative)
Our Accountant was entering our Net Short Term Capital Gain (Loss) on K-1 Part III, line 38
Now looking it over, it DOES seem that Turbo Tax's and Tax Slayer's claim that this is a NET calculation of K-1 lines 7, 8a, 8b, 8c checks out... in which case it's true there couldn't be both a NET CAPITAL GAIN and a NET CAPITAL LOSS.
It's worth noting this this method of calculation (vs our accountant's) does not change the Stock basis at the end of the corporation's tax year (form 7203, Part 1, Line 15), it just balances out another way (but in a way that Turbo Tax will allow me to proceed and complete my 1040 filing!)