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Get your taxes done using TurboTax
Your initial investment counts as a contribution and should be reported on Part I line 1 for each K-1. If the additional $7k was loaned to the business this is reported in Part II as Open Account Debt. If the $7k is considered additional contributions, it should be added to the amount on Part 1 line 1.
The only amount you should list in Part III is line 35 for the ordinary business loss.
This should correct your error. TurboTax has had a few instances when your error was received and my listed corrections made, but the error does not clear. If this happens to your return, you will have to delete the K-1 and re-enter the information, making sure to report the 7203 information as I have listed here.
To delete your K-1 in TurboTax Online you can follow these steps:
- Within your return in TurboTax Online search for K-1.
- Click the Jump to link in the search results.
- Click Continue then Edit for your S-Corp K-1.
- Delete the K-1 line(s) with the trash can icon.
- Click on Tax Tools on the left side of the screen.
- Click on Delete a Form.
- Scroll down to your K-1 and click Delete if they are still there.
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