why does TT not allow to proceed with capital loss ?

[Al117]

TY 2023 (home and business, CD purchased from wholesale club). Unable to enter Older investment where I am one of several limited partner/ passive entity, now (2023) declared bankrupt with no documents possible to be sent to me. 

Keyword query and google search lead me to:try several times jumping to "investment sales", "Sched D" and Schedule E but the questions are not related to limited partnership and as soon as enter "no" takes me back to main page of business summary. Basically option to continue with query is missing. 

I need step by step solution to complete return or a direct # for TT. Have wasted two hours already today.

Eg if jump to investment sales asks about crypto, stocks, 2nd home, ESPP etc; if jump to Sched D (capital losses/ gains) again similar; if jump to sched E takes to rental or royalties only (IRS website indicates should include parterships.. Again looking for step by step instruction. 

[DoninGA]

If you received a Schedule K-1 from the partnership you should be entering that K-1.

To enter a Schedule K-1

Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Business Items (Business Investment and Estate/Trust Income using Home and Business)
On Schedule K-1, click on the start or update button

Or enter k-1 in the Search box located in the upper right of the program screen. Click on Jump to k-1

As a member of a multi-member LLC you should be also filing a Form 1065.  The personal editions of TurboTax, to include Home & Business, do not support Form 1065.

You would need the TurboTax Business edition to complete and file Form 1065.  The Business Edition can only be installed on a Windows based personal computer and does not support personal tax returns, Form 1040.

Go to this TurboTax website for the Business Edition - https://turbotax.intuit.com/small-business-taxes/cd-download/

[Al117]

Thank you, let me clarify. Per my OP, No K1 or other document will be sent - there is no active person to manage company. Also per my OP, I was a limited partner in an investment offering ie passive member, not the person who files the 1065 etc. It has been wound up as of 2023 with no value left. I can't start with forwarding a rolled over loss from previous years as loss has been realized in TY 2023. TT does not allow me to enter this information despite using help and "jump to" clicks. If you don't believe me try entering yourself. and you will be taken back to the summary age. Its a simple question how to enter a passive capital loss.  

[Al117]

Also per my OP, I am filing a personal home and business return not a business only return. 

[DoninGA]

I will page some others who will have more expertise in this area - @Mike9241 or @tagteam would either of you be able to help here?

[tagteam]

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@Al117 wrote:

Its a simple question how to enter a passive capital loss.  

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That is the problem; there is no such thing as a "passive capital loss". 

If you know your basis in the LP, then it should be a simple matter of entering your basis and subtracting that figure from the sales price, which would be $0 in this instance since your entire investment is worthless (so you have a capital loss).

Generally, this would be entered as a capital loss on Form 8949 and Schedule D but I will wait for @Mike9241 to provide input (and @Rick19744 if he's around).

[Al117]

Thank you. Yes I know my starting basis. My point is: When you jump to Schedule D. It asks "'did you sell any of these investments in 2023? (stocks/ mutual funds/ crypto/ shares from ESPP/ land/ personal items) and when you say no, TT Home and Business  takes you back to the main screen. Same with when you try jumping to Schedule E. Same with any other section of the software. I believe this was all relayed on the OP. There is no way to enter the basis which looking at IRS form would have taken me less than 2 min to complete. I am finding the interface not helpful and actually getting worse over time. This is very unfortunate since I would have been the biggest supporter, had it worked as I expected it to work. TT folks might also want to employ someone on the weekend to man the lines and supply simple answers by phone, since many people do their taxes on the weekend and they do charge for this software and service. 

[Rick19744]

There are a number of facts that have not been provided, but will provide some commentary:

• You don't mention how long you have had this investment?
• Have you received a K-1 in the past?
  • If so, this investment should have been populated in TT
  • You don't indicate whether you have any passive activity carryovers, since based on your limited partner status, any losses would only be available to the extent of passive activity income.
• Since we don't have the above facts, if all you are needing to do is input your loss on the investment:
  • Where are you attempting to input this detail?
  • Don't get hung up on semantics when reviewing the input commentary
  • If you are just attempting to input this through the investment section, just say "yes" to selling.  Don't worry about the semantics; it's the correct end result that counts
  • It appears that since this investment / business is bankrupt, then your proceeds are zero
  • Your tax basis is the cost basis.
• In order to claim the loss, you need to make sure that you take the loss in the proper year.
  • Are you certain that you won't receive any proceeds out of bankruptcy?
  • Has the business notified you that no future K-1's will be prepared?
  • Do you have documentation that the business has actually filed bankruptcy?
• This isn't necessarily a TT problem, the problem is that these type of investments get complicated very quickly and you need to have an understanding of how everything works when preparing your tax return.

[Mike9241]

we don't know how your capital loss arose, but IRC section 469 contains the rules for passive activities

.(1)Certain income not treated as income from passive activity
In determining the income or loss from any activity—
(A)In general
There shall not be taken into account—
(i)any—
(I)gross income from interest, dividends, annuities, or royalties not derived in the ordinary course of a trade or business,
(II)expenses (other than interest) which are clearly and directly allocable to such gross income, and
(III)interest expense properly allocable to such gross income, and
(ii)gain or loss not derived in the ordinary course of a trade or business which is attributable to the disposition of property—
(I)producing income of a type described in clause (i), or
(II)held for investment.

so perhaps you need to go back to the return preparer and inquire why the loss is passive

[Mike9241]

well it would seem that a passive capital loss would have to go on line 11S so that it flow to form 8582

here is from Reg 1.469-1

(d)

(2) Coordination with sections 613A (d) and 1211. A passive activity deduction that is not disallowed for the taxable year under section 469 and the regulations thereunder may nonetheless be disallowed for the taxable year under section 613A(d) or 1211. The following example illustrates the application of this paragraph (d)(2):

Example.
In 1993, an individual derives $10,000 of ordinary income from passive activity X, no gains from the sale or exchange of capital assets or assets used in a trade or business, $12,000 of capital loss from passive activity Y, and no income, gain, deductions, or losses from any other passive activity. The capital loss from activity Y is a passive activity deduction (within the meaning of § 1.469-2T(d)). Under section 469 and the regulations thereunder, the taxpayer is allowed $10,000 of the $12,000 passive activity deduction and has a $2,000 passive activity loss for the taxable year. Since the $10,000 passive activity deduction allowed under section 469 is a capital loss, such deduction is allowable for the taxable year only to the extent provided under section 1211. Therefore, the taxpayer is allowed $3,000 of the $10,000 capital loss under section 1211 and has a $7,000 capital loss carryover (within the meaning of section 1212(b)) to the succeeding taxable year.

so it seems possible to have a capital loss from a passive activity (never seen it on a k-1) the reg does not give an example of what the capital loss from activity Y might be. 

[Al117]

Basically, where do I enter the first year of requesting up to $3k capital loss on 2023 TT  home and bus to offset against any long term capital gains? The investment has been for many years and I don't have any new documentation or any expectation of receiving any documentation in future inc a K1.  None of the options on TT support first year of entry for a limited (passive) partner. Step by step instruction would be appreciated. This info would approximate to amount listed as "basis" on Form 8949 Part II column h and also on Schedule D lines 10& 15. And $3000 entry for line 21. Yes I went and printed these forms in frustration.