For me, I would need some clarification.
1. You state you had capital loss carryforward....that would be on 1040
2. Your K-1 shows $23K in distributions (Box 16D)
3. You have some sort of transaction re Section 1245 property
4. You think a reclassification should occur moving $23K in distributions to LTCG?
5. The K-1 shows LTCG in box 8a all ready shows $23K
6. Box 16D shows $23K in distributions
Re 1245 property....part of any gain would be ordinary income based on depreciation recapture. Gain in excess of the depreciation recapture would Section 1231 gain (LTCG).
I don't know what you mean by moving distribution to LTCG? Two entirely different things. A distribution means you received either cash or property worth $23K. If that in fact is the case, that can not be redone. The only way this would change is if the amount of distribution exceeds your basis in the S stock...and that excess would be treated as LTCG...but it wouldn't change the amount of the distribution.
As far as the LTCG, when you entered the K-1 information into TT, it should have applied that against any capital loss carryforward on your 1040. The Sch D is on your F1040.
If I have the scenario correct, there is no reclassifying to do or can be done. You can not move a distribution to LTCG.
If the computation of the Box 8a gain is incorrect; any change would be done at the 1120S level and would affect all shareholders.
**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**
