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yoadrienne6
Returning Member

Form 7203 quick help

Argh... last minute help, please!

I think I understand most of Form 7203.... 2 questions:
1) For Parts 2 and 3 (parts that reflect deb): Should we be putting a "-" sign in front of the amounts? Part 2 is a debt section, so I'm not sure if that will indicate a double negative and therefore calculate it as a +.

2) Part 3, column b instructions: "Enter any loss or deduction items disallowed due to basis limitations in prior years that were carried forward."  How would I know if any amount was disallowed in prior years? On Schedule M-2 of my Tax Return, I've been carrying over our S Corp losses from year to year. I don't know how to determine how much, if any, the IRS didn't allow.

MANY THANKS!!!

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4 Replies
PatriciaV
Employee Tax Expert

Form 7203 quick help

1) There are no negative numbers anywhere on the form.

 

2) if in any year, the losses reported on Schedule K-1 took your basis below zero. those were "disallowed" and carried forward.

 

Note that Form 7203 reports your side of the investment. These calculations are not made by the S-Corp; these should come from your historical records. 

 

For more assistance see:

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yoadrienne6
Returning Member

Form 7203 quick help

@PatriciaV  Thank you for your reply! But, I find it confusing in that you say that these are MY amounts, but every line of Part 3 of Form 7203 asks for the amounts from the K-1 (and the business loss from that IS from the Company), including "carryover amounts"....so how is that personal amounts if the language is specifically asking for K-1 amounts?

AliciaP1
Expert Alumni

Form 7203 quick help

Your K-1 is YOUR share of the business activities.  It makes more sense if there are multiple owners, but it is still valid if you are a sole owner of an S-Corp.  

 

@yoadirenne6

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yoadrienne6
Returning Member

Form 7203 quick help

oh lol; I am the sole owner; perhaps that's why my K-1 lines up exactly with the business numbers. Thank you!

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