I have now completed an S-CORP tax return in TurboTax Business (i.e., the desktop software program), for tax years 2015, 2016 & 2017. Throughout this process, I have discovered that the software program DOES NOT ASK ABOUT, nor does it keep track of any Capital Contributions (i.e., increases, Paid-In-Capital) made by shareholders during the tax year as it should. By not asking about the Capital Contributions, the Stock and Loan Basis Information Worksheet is INCORRECT which in turn, makes the Shareholders' Basis Statement AND the Shareholders' Basis Report INVALID.
Now I am beginning to wonder if I made the correct choice in using TurboTax Business software to complete these S-Corporation tax returns...
If anyone out there has used TurboTax Business software to prepare your 1120 or 1120S tax return, I highly recommend that you recheck the shareholder basis that you have reported to the IRS as it may be incorrect, necessitating the need to amend your tax returns.
RESOLUTION
To resolve the issue above, it will be necessary for you to switch to Forms mode and manually enter the amount of Capital Contributions made by each shareholder on the Stock and Loan Basis Information Worksheet for each shareholder individually. This will automatically update the rest of the forms and the shareholder basis reported to the federal government (after you amend). 😲
