2025 TurboTax business desktop version is not transporting the "Capital Loss Carryover Utilized" amount correctly.

[Mafinc]

TurboTax business 2025 desktop is not transporting the "Capital Loss Carryover Utilized" amount correctly calculated on the Net Operating Loss Worksheet to the Schedule M-1 Line-8. I am attaching the screenshots of my Schedule M-1 and my NOL operating loss worksheet for you guys to see. I have tried to correct the amount manually, but the program does not let me do it. Is there another way to solve this bug?

[PatriciaV]

The amount from the NOL Summary Worksheet in Column B (Deduction Allowed in Current Year) is reported on Form 1120 Line 29a. The amount shown on Schedule M-1 Line 8 is the Capital Loss Carryover from Schedule D Line 6. 

These are two different carryovers, either or both of which may require manual entry on Schedule M-1 in order to Reconcile Book to Tax Income.

To see the actual error for any box highlighted in red, click the Errors icon above the list of Forms in My Return. This opens a message box below the open form.

[Mafinc]

Hi Patricia,

Thank you for your help!

On my Schedule M-1 Line 8 there are two lines with information about Capital Loss carryover:

• The first line says, "Capital loss carryover utilized - $5,012.00".
• The second line says, "Capital Loss Carryover - $0.00". 

I am attaching my Schedule D and, as you can see, the $5,012.00 informed as "capital loss carryover utilized" in Schedule M-1 is actually the amount informed on its line 12 as "Long-term capital gain from installment sales from my Form 6252, line 26 or 37" which I am also attaching. So, it seems that this amount was incorrectly transferred from Schedule D to Schedule M-1 line 8 by TurboTax.

I am also attaching my Form 1120 where you can see that TurboTax has correctly transferred the NOL Summary Worksheet in Column B (Deduction Allowed in Current Year) amount and reported it on Line 29a.

I have been trying to do a manual entry on Schedule M-1 where the error box highlighted in red pops up in order to Reconcile Book to Tax Income, but unfortunately, TurboTax is not letting me do it. 

The only way I found today to manually correct this error is to add another line to my Schedule M-1, on line 8, labeled “TurboTax Adjustment, and enter the negative amount of -$5,012.00" to offset the incorrect amount of $5,012.00 carried over from my Schedule D by TurboTax. By doing this, the amount on line 10 of my Schedule M-1 will match the amount on page 1, line 20 of my Form 1120, as required by the U.S. Internal Revenue Service (IRS).

[JotikaT2]

I would like to take a deeper look at this. However, I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the directions below:

TurboTax Desktop/Download Versions:

1. Open your return.
2. Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent” *
3. This will generate a message that a diagnostic copy will be created.  Click on OK and the tax file will be sanitized and transmitted to us.
4. Please provide the Token Number  (including the dash) that was generated in the response.

*(If using a MAC, go to the menu at the top of the screen, select Help, then, “Send Tax File to Agent”)

@Mafinc 
 

[Mafinc]

Hi JotikaT2,

I have done as you asked me and the token number is 123146102400649-59633192.

I am looking forward to your analysis and comments, thank you.

Marcus Fontoura

[JotikaT2 · Accepted solution]

I've reviewed your diagnostic copy and it looks like you manually entered the installment sale proceeds in the Income section under Sales and service receipts.  This amount actually does not need to be entered here as it's already reported as an installment sale when you reported the sale of your business property.  

Since you have a capital loss being carried forward from the prior year, the installment sale proceeds are actually reducing that carryover amount.  This occurred because your installment sale proceeds were due to capital assets being reportable on Schedule D.  You'll find this reduction reflected on your Carryover Wks in the forms view.

To correct the error you were encountering, you will need to delete the income amount currently entered under Sales and service receipts.

Then, go back into the Schedule M-1 reconciliation to line 8b, and delete your manual entry where you reduced the $5,012.  This should resolve your error and allow you to proceed.