K-1/7203 Bugs

[rob140]

Using (TurboTax 2022 Desktop Windows)

I've encountered several problems with inputting K-1s and the resultant 7203 forms. (I've inputted everything and am reviewing the PDF prior to filing.)

We have two K-1s that were entered. These were imported from the year before, and then values entered for this year. I entered something wrong for one of them, so I deleted it and recreated it. When reviewing the resultant 7203s, ONLY ONE 7203 exists where there SHOULD BE TWO, and IT DOESN'T SHOW ANY OF THE VALUES FROM THE K-1, but rather carries last year's basis all the way through the form to the end.

Issues enumerated:

1. In the list of K-1, the person's name is not displayed, leaving to guess which one is which by the order they were entered.

2. *** K-1 income is not shown on the 7203. It imported the basis from last year and made no adjustments for the income this year, and carried it through to the end of the form. ***

3. Can't uncheck checkboxes for "Check boxes that have an amount or are checked on the form" when updating (after having already gone through the entire process, and coming back to edit.).

4. After deleting the (imported) K-1 (since I couldn't uncheck the checkboxes) and recreating the K-1, the 7203 is not generated at all for the deleted/reentered K-1. I only see a 7203 for the other K-1.

[AliciaP1]

I cannot recreate your issue.  It would be helpful to have a TurboTax ".tax2022" file that is experiencing this issue.

You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, here are the instructions: 

In TurboTax Online, go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number. 

In TurboTax CD/Download versions, go to the black panel on the top of your screen and select Online. 

1. Scroll down to and select Send tax file to Agent. 
2. You will see a message explaining what the diagnostic copy is.  Click send through this screen and then you will get a Token number. 

Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.   

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution

@rob140 

[rob140]

Submitted, 1081601

[AliciaP1]

The Form 7203 was carrying over from 2021 because the Schedule K-1s reported a loss for the year.  Since they report income this year, and no shareholder distributions to either of you, the Form 7203 is not required.  This is why TurboTax left one deleted and has not populated the other.  

Per the IRS:

Form 7203 is filed by S corporation shareholders who: 

• Are claiming a deduction for their share of an aggregate loss from an S corporation (including an aggregate loss not allowed last year because of basis limitations), 

• Received a non-dividend distribution from an S corporation, 

• Disposed of stock in an S corporation (whether or not gain is recognized), or 

• Received a loan repayment from an S corporation.

You can either safely delete the remaining 7203 or leave it - TurboTax will not file the form with your return since it is not required.  If you want to utilize the form to maintain your basis calculation (as you are responsible for doing) you can add the other 7203 back, but you will need to populate both forms yourself.  Instead of this, you can make a note of last year's basis, add this year's income per the Schedule K-1s, and compute the ending basis to enter into your 2023 returns.

If you want to add the 7203 for the taxpayer (the existing 7203 has a matching masked SSN to the Spouse on your return), you can follow these steps in TurboTax Desktop:

1. Within your tax return use the Forms icon at the upper right of the screen to switch to Forms mode
2. Scroll down to the taxpayer K-1 S Corp (this is the first on the list) and select it
3. In the preview pane, scroll down the form to below line G and use the QuickZoom button for QuickZoom to Form 7203 for stock and basis limitations
4. Once you select your answer for line D the form will show in the menu bar on the left
5. You can then populate the form

@rob140