topic How to report an S-Corp MTM Losses? in After you file

How to report an S-Corp MTM Losses?

mtm_trader — Tue, 24 Feb 2026 07:10:26 GMT

I elected an MTM accounting for my trading S Corporation. However, when I import TD Ameritrade's 1099-B, TurboTax Business automatically classifies my trading losses as capital losses, not ordinary business losses. How do I trick the program in to classifying my trading losses as ordinary business losses so they offset my ordinary income on my personal return?

Re: How to report an S-Corp MTM Losses?

Anonymous_ — Wed, 09 Aug 2023 23:14:02 GMT

Are you actually using the Business edition (TurboTax Business) and not a personal TurboTax product?

TurboTax Business does not support importing tax reporting statements such as Form 1099-B.

Regardless, as a trader with an MTM election, your trading activity is reported on Form 4797 (see screenshot below).

Re: How to report an S-Corp MTM Losses?

mtm_trader — Thu, 10 Aug 2023 18:28:21 GMT

Oops. I just checked - you're correct. I did enter the values of Proceeds and Cost Basis manually, from TD's Form 8949. But the fact remains that the program populated the loss value in to Investment Income-> Capital Gains or Losses category. I am afraid that when I carry this info from my corporate return to my personal return, it will qualify them as Capital Losses that offset Capital Gains, not Ordinary Income. Is this not going to be the case?

Re: How to report an S-Corp MTM Losses?

Anonymous_ — Thu, 10 Aug 2023 20:19:51 GMT

You will input the information from your K-1 (1120-S) into your personal income tax return (1040) and the profit (gain) from your trading activity should end up on Line 1 of your K-1 (i.e., ordinary business income).

Re: How to report an S-Corp MTM Losses?

mtm_trader — Wed, 30 Aug 2023 02:21:13 GMT

Hi!

I just generated a K-1 from my corporation return and the loss from my trading activity was reported in Line 7 Net Short-Term Capital Gain (Loss), which is obviously wrong for MTM accounting. What am I doing wrong??