K-1 Schedule box 13 W code

[jimi1986]

For Box 13 W code below is the description I have received from the ETF :

Value=1

The Portfolio deductions from investing activities if any, are non-deductible for certain taxpayers, including individuals and would reduce your tax basis in the partnership. Please consult your tax advisor.

What option should I select for above reason.

[AliciaP1]

You will mark I Have Another Description Item rather than Miscellaneous Itemized Deductions for your description.  When you change the check box, a new pop up will show below the line and you can enter the description "Non-Deductible Portfolio Deductions" and the amount.  Then, when you are calculating your basis in the partnership (Form 7203), you will use this amount on the Nondeductible Expenses line.

[jimi1986 · Accepted solution]

Thank You Alicia for the updates that helped. Deduction amount is only 1$

I am using Turbox tax deluxe software, will form 7203 get generated from my inputs  or I have to edit it manually.

Also after filling the deduction info I am getting below options to check.

Is it correct to select all of my investment is at risk.

Thanks,

Jimi

[AliciaP1]

Yes, unless you have some kind of guarantee that your investment will be returned even if there are losses in excess of it (this is extremely rare).  The Form 7203 will get generated in the review process if you are reporting a loss or took a distribution from the business.  If you had neither of these, you will still maintain your basis calculation manually and outside of TurboTax.

@jimi1986 

[jimi1986]

Thanks a lot for the quick reply.

This is really helpful.