You should delete your Form 7203 and re-enter the information for your basis calculation. Remember, the basis calculation is for 1 year so you cannot have a gain and a loss in the same year. To delete the form and re-enter in TurboTax Online please follow these steps:
This is helpful, but I had gone back to correct the form before your reply. I know only show the income in Part 1 and "0" for losses in Part 3, but I am getting the same message about not being able to have a loss in Part 3. This seems like a glitch in the software.
Please clarify if you have entered zero for the losses in Part 3, or if you deleted all numbers from that box.
It sure does seem like a software glitch. I am getting the exact same error no matter how I enter it. I am actually a software developer, so to test this, I have just messed with it, changing data in all the lines with just any numbers that the error says is incorrect, to make it work, and it just keeps giving the same error, but for a different line 3 sub item. It tells me to change section I and If I do that, then it tells me to change section 3. It goes in a circle. I now have the correct data on the form, same as my partner that has already filed and I have triple checked everything. I am just going to file and ignore the 5 warnings that are coming from the form. I have reviewed the numbers and everything on the form seems correct and matches my partners. I need to put my full amount of Line 3 A, and it says not to enter a loss there. But if I change that to zero or negative, nothing works. For zero, I get a message that line 3g cannot have a gain in Part I and a loss in Part III. But 3g has a zero. If I put a number there it goes down to another 3(x) item giving the same error. The form is now correct, but it says I have errors.
I am getting this same error for the 2022 tax year. "Turbotax Form 7203 error message says Line 3g cannot have a gain in Part I and a loss in Part III." The only way to "trick" the program is to show Part III Current Year losses and Deductions (Column a) as Column b amounts (Carryover amounts from the previous year). I know this is not the right solution and will likely create questions with the IRS when I e-file. The fact is that I DO have Net Capital Gains to show in Part I, line 3g, as well as losses in Part III.
Any thoughts?
P.S. I am not using TurboTax on-line, but the Windows-based version I bought.
Gain reported on Part i line 3g should provide basis for an ordinary business loss reported on Part III line 35.
Do you see an allowable loss from stock basis line 35 (c)?
No--the Form 7203 I received from my S-Corp company has nothing in line 35, Part III. My K1 shows a net short-term capital loss on line 7 and a net long-term capital gain on line 8a. The value in line 7 on the K1 is reflected as a loss on line 38, part 3 of the form 7203 and the value in line 8a on the K1 is reflected as a gain on line 3g, part 1, of the form 7203. My K1 doesn't have any ordinary business losses, only ordinary business income, as reflected on line 1 on the K1 and again on line 3a, part 2 of the form 7203.
The bottom line is that the Form 7203 as filled out in TurboTax, is exactly the same as the Form 7203 I received from my company, along with my K1. It should be correct, but TurboTax keeps giving me the error message as I described.
Make sense?
The problem GmWells is having is almost exactly the same as I am having, accept one other detail - I have a deduction represented in line 45 of PartIII, which comes from line 12-S of my K-1.
The only way I have been able to make TT not report an error is to completely blank out line 3g in Part1 of 7203; but doing this does not give me warm fuzzies.
My inclination was to leave the error on the form and e-file anyways -BUT- the error prevents TT from performing the e-file.
I am using the downloaded Deluxe version on Windows. I do ALOT of software developement and QA work... this "smells/feels" very much like a bug.
If there is a way to over-ride TT and submit the e-file, please let me know how. No way am I going to submit with a 7203 that is different than the 7203 that our companies very reputable and expensive accounting firm provided.
Totally agree with applefam5! I have a Form 7203 that my company's "very reputable and expensive accounting firm provided," along with my K1 (and K3), and I am VERY uncomfortable "tricking" TT to change the TT version of the 7203 to avoid an error that I strongly suspect is not valid and is a glitch with the program.
Please respond.
TT-I'm having the same issue as the 2 prior individuals. I also have entries on Part III lines 41, 45 and 46. I'm trying to recreate the 7203 provided to me today by CLA, the accounting firm that prepared the K1 for my firm. Look forward to your response. Wondering if I need to pay for a live chat... This is the only issue holding up filing my returns...
After I entered my last post, I decided to pay the $50 and call a TT expert. After an hour discussion, we resolved this issue. So-Form 7203-line 3g, we reported the net number from K1 lines 7 and 8. that was a postive number for me. In part III of Form 7203, we removed the entries on line 38 a, b, c and d. We didn't enter 0, we deleted the entries. While this does not exactly match the CPA provided 7203, the stock basis on Line 15 does match and when you study the form we get to the same place. I hope this helps you.
Thanks Letsgo8, for "taking one for the team"!
I had actually figured out that "work around" on my own but wasn't ready to commit quite yet.
I spoke with a rep from our accounting firm this morning; officially, they stand behind the accuracy of form 7203 as provided. Unofficially, after I explained the situation, he agreed that the work around is "ok" given that the end result is the same.
IMO, based on my research, there is no doubt that there is a logic problem in TT's 7203 form!
I'm going to bite the bullet and e-file tomorrow with the work around - but I will be looking much harder at TT alternatives for next years go-around.
Thanks All.
Thanks, but that didn't work for me. What is the phone number for the TT Expert you called? I can't find it on the web site.
Thanks
GmWells-Sorry to read your message. I connected with the TT support team by:
running error check
an option that presented itself on the screen was to speak with a live TT tax expert
so I clicked on that option
it took me out to Intuit website to pay the $50
then sent me a message that a person would call me within a few minutes and they did.
Hope this helps!
Thanks, Letsgo8. I did manage to spend about 3 hours speaking with various TT help desk people and finally got through a "Tier 2 supervisor" who tried various things to help me. Unfortunately, she could not find a work-around. I walked her through, via screen-share, all of the steps I took to input my K1 data and showed her that my K1 and Form 7203 I received from our accounting firm are EXACTLY the same as the forms in TT , but TT keeps telling me that I can't have a positive number in blocks 3a and 3g in Part I on the 7203--even though these are SUPPOSED to be positive numbers, leaving "loss and deduction items" for Part III. After over 2 hours with her, she said she was going to submit a request to the TT development team to research it further. She advised me to file for an extension, since this could take some time (which I already did).
Perhaps my problem stems from the fact that I am using the Windows desktop download version of TT and not the on-line version like it sounds you are using. (Shouldn't be an issue.)
I have used TT since 2004 and have never experienced anything like this. Pretty frustrating.
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:
Go to the black panel on the top of your screen and select Online.
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.
Thanks. I followed your instructions and my token number is: 1130012.
Upon review, you have a 0 entered in the loss section for Ordinary Loss which is causing the error for that line.
Your Capital Gain/Loss issue is because the instructions state to add lines 7, 8a, 8b, and 8c from your K-1 and then enter the net result either on line g if it is a net gain or line 38 if it is a net loss. If there are no other numbers on those lines of your K-1 than the two you have listed on your 7203, you have a net loss of $2,166 that needs entered on line 38 to clear the other error.
Thanks, those adjustments cleared it up so that TT will allow me to file.
Just one clarification: The 7203 in TT does not exactly match the 7203 I received from my company's accounting firm that provided our K1's, K3's, and Form 7203's, in that the stock basis gains and loss calculations are different for lines 4 through 11 and 14. However, for lines 13 and 15, the values match in TT and my original 7203. My assumption is that this is OK, since line 13, which reflects the stock divestiture I received in 2022 is correct (and, hence, is the cost basis for that divestiture for which I received a 1099-B). Also, since line 15 matches my original 7203, I assume that this is OK, since this line provides the Stock basis at the end of the corporation's tax year. I assume that this number is something the IRS will want to match with next year's Form 7203, line 1---correct? If my assumptions are correct, then I should be safe to file and avoid any issues with the IRS this year or next year--correct?
Sorry for the additional questions--just want to understand--THANKS!!
Hello!
I'm a little bit confused with the section II of the form 7203. IRS says: You must complete this section if you have personally loaned money to the corporation. If I personally did not lend money to the corporation, but the corporation borrowed from an external bank, then I do not need to fill out section 2 and specify the loan, is that correct? Thank you!
If
then you do not have to complete Part II Shareholder Debt Basis of IRS form 7203.
IRS Instructions for Form 7203, page 3, states:
Part II. Shareholder Debt Basis
You must complete this section if you have personally loaned money to the corporation.
and also this
Loans that a shareholder guarantees or co-signs are not part of a shareholder’s loan basis except to the extent the shareholder makes a payment on the loan guaranteed or co-signed.
no you cannot have a gain and loss in the same year, but this part 3 also shows carry over losses from the previous year which then the allowable amount get put on as a loss and can actually 0 out your gain.
this is what I currently have and it wants to tell me there is an error in which there is not and it is exactly how my K1 statement for this line item is printed out.
i dont have any losses in column a but mine are from a carry over and it still show an error but you can have a carry-over loss and a gain in the current year but the program won't register it as correct. it's a programing issue with whoever made this program