topic K1 in Business & farm

K1

tly27 — Sat, 22 Mar 2025 15:44:31 GMT

I have a K1 from a S corporation, it shows a loss in Box 1, but the cash basis report shows this is unallowable and has it for carry forward for next year. But when I asked the question is I worked for in the business for more then 500 hours, I said Yes, I worked More then that and received a W2 for it. I also put that I had risk because that was the only one that seemed to fit, ( I did not put in any cash in the business) mine investment was labor and hours worked. So when doing that it took the loss off my income. Is this right? Thank you for your help.

Re: K1

JamesG1 — Sun, 23 Mar 2025 15:13:41 GMT

You do not appear to have an investment that is at-risk and cannot take the loss in Box 1. Or do you have an agreement as a member of the S corporation, that refers to you sharing losses against current income?

On the screen Other Situations, select the hyperlink Learn More to the right of the question All of my investment in this activity is at risk.

The At-Risk Rules to the right states:

At-Risk Rules

The at-risk rules prevent you from claiming losses that exceed your actual investment in a business. Your loss is considered the lesser of the following:

- The amount of the loss
- The amount you have at risk in the activity

You are at risk up to the amount of cash and the adjusted basis of other property you contribute to the activity. Funds borrowed for use in your business and for which you are personally responsible can be added to the at-risk amount..

You are not considered to be at risk if you:

- Do not have to repay borrowed amounts because you have an arrangement that protects you from loss.
- Borrowed money from a lender who has an interest in the business other than as a creditor.

You can carry disallowed losses forward to a year when you have amounts at risk. Be sure to keep records of these disallowed losses so you can claim them in later years.

See this TurboTax Help.

Re: K1

Rick19744 — Sun, 23 Mar 2025 17:48:14 GMT

You need to be maintaining a tax basis schedule for this "investment".

You can only determine if this loss is allowable if you know your tax basis.

Additionally, you should be completing IRS form 7203.

How long have you been receiving a K-1?

What type of income / loss has prior year K-1's reflected?