I am a very small SubS corp with a single owner (me) and single employee (me). In 2020 I had a loss of 2600.00 dollars in the corp due to covid related issues and could not pass the loss on to my 1040, as I had 0.00 basis in the corp. (taking the loss would have created a NEGATIVE basis, which isn't allowed). Unfortunately when I tried to import my 2020 1120S into my 2021 turbotax online, the program would not accept my PDF file and I can't locate the .taxfile on my computer. The program did not ask me about prior carry over losses (at least that I was aware of). How do I enter the 2600.00 loss into the PROGRAM (not the K1 form- I want the program to recognize the loss and place it appropriately on the 1120S and K1 forms) so it can be taken against an 11000.00 profit in 2021....?
Thank you in advance for your help with this matter......
I formerly worked full time, earned much more income, and could afford an accountant....but now that I'm semi-retired I'm trying to do it with turbotax...and have been successful the last 3 years.....until this situation arose.
You do not deal with the 2020 unallowed loss on your S-Corp's return, but on your personal return.
On your personal return, when entering the 2021 Schedule K-1 from the S-corp, in the interview, you'll find a screen titled Other situations. On that screen, check the box saying I have at risk losses carrying over from 2020. Then Click Continue at the bottom of the screen (see attached screenshot).
On the next page, you can enter the 2020 unallowed loss as a negative number in the second column labelled Carryover Prior year loss.
You do not deal with the 2020 unallowed loss on your S-Corp's return, but on your personal return.
On your personal return, when entering the 2021 Schedule K-1 from the S-corp, in the interview, you'll find a screen titled Other situations. On that screen, check the box saying I have at risk losses carrying over from 2020. Then Click Continue at the bottom of the screen (see attached screenshot).
On the next page, you can enter the 2020 unallowed loss as a negative number in the second column labelled Carryover Prior year loss.
Thank you SINCERELY for taking the time to educate me on how to deal with this issue.
I promise you I will "pay it forward" in my area of expertise (medicine).
RAC
Hi @MinhT1, I am wondering why you suggest OP use At Risk losses instead of Basis loss limitations. Please expand, thanks!