Thank you for the token. Form 7203 for Shareholder #1 has no form errors. Entries in Part III for current year losses/deductions flow to the debt basis as expected. Edits to this information are preserved when the form is closed.
Since you are reporting a loss for the year, the entry in Part III reduces the Shareholder Debt Basis and is not carried over. Because there is no stock basis, the loss is not applied to Part I.
Part III Line 47(d) indicates the loss is allowable, based on the debt basis.
If you were expecting the loss to be reported differently, please provide more info.
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