1) create a capital asset sale worksheet
2) enter the details on the capital asset worksheet
3) enter adjustment code S
4) this will create an adjustment worksheet
5) use this worksheet part III where the line is for sale of 1244 stock
6) check the box
7) if on the capital asset worksheet the box with the S is red or pink delete the S
schedule D instructions
Small Business (Section 1244) Stock
Report an ordinary loss from the sale, exchange, or worthlessness of small business (section 1244) stock on Form 4797. However, if the total loss is more than the maximum amount that can be treated as an ordinary loss for the year ($50,000 or, on a joint return, $100,000), also report the transaction on Form 8949 as follows.
Small Business (Section 1244) Stock
Report an ordinary loss from the sale, exchange, or worthlessness of small business (section 1244) stock on Form 4797. However, if the total loss is more than the maximum amount that can be treated as an ordinary loss for the year ($50,000 or, on a joint return, $100,000), also report the transaction on Form 8949 as follows.
1. In column (a), enter “Capital portion of section 1244 stock loss.”
2. Complete columns (b) and (c) as you normally would.
3. In column (d), enter the entire sales price of the stock sold.
4. In column (e), enter the entire ba-sis of the stock sold.
5. Enter “S” in column (f). See the instructions for Form 8949, columns (f), (g), and (h).
6. In column (g), enter the loss you claimed on Form 4797 for this transaction. Enter it as a positive number.
7. Complete column (h) according to its instructions.
turbotax will automatically do these entries. it will allow the loss equal to the lesser of
the actual loss or $50K if not filing jointly or $100K if a joint return
only if the ordinary loss is less than what Turbotax computes do you need to enter the amount in the ordinary loss box
