for the 7203 the nondeductible expenses are entered as one of the first items on the 7203 (item B) in Turbotax then there's a question about reg 1.1367-19g). what this allows is for you to reduce your basis and take deductible losses before you reduce basis by nondeductible expenses.
example without the election: tax basis/at-risk $50 loss $60 nondeductible expenses $10. basis/at-risk first reduced by nondeductible expenses so only $40 of losses are allowed. the other $20 become basis/at-risk carryover. with the election, $50K of losses are allowed and you have $10 of loss basis/at-risk carryover and $10 of nondeductible expense basis/at-risk carryover
