S-corp dissallowed loss carryforwards basis limitation

[comboardq]

I am a passive shareholder in a S Corp, trying to input dissallowed loss carryforwards found on a CPA prepared Shareholder Basis worksheet for the prior year.

At the "Other Situations" portion of the K-1 interview, the only way I have figured out how to input these loss carryforwards is by selecting "I have at-risk losses" carrying over", even though I am not at risk and have 0 basis (And I do specify 0 basis, so the losses aren't deducted).

If I use this method, TT generates an "At Risk Wks - S" and a form 6198 (Of which none are deductible). I have not seen a form 6198 prepared in prior years by CPA even though I had the same situation.

Is this the correct method to handle my situation in TT?

Edit: this concerns 2019, so there is no form 7203. 

[tagteam]

You have a basis limitation, not an at-risk limitation. 

[comboardq]

@tagteam Right -- where would I enter carryforward losses suspended due to basis limitation? Again, I have not been able to find anything besides the At Risk Wks - S

...I should add that this would be for 2019, so there is no form 7203. The question is, can dissallowed losses due to basis be tracked on the At Risk Wks - S, assuming basis is 0, and thus generating a 6198?

[tagteam]

For 2019, you would use that basis worksheet. 

[comboardq]

@tagteam Okay, so track the dissallowed losses limited by basis outside of TT... then where would I input the loss carryover to offset future income? It seems like this is something the IRS would want to see and ideally seomthing TT should be tracking and handling.

This answer https://ttlc.intuit.com/community/business-taxes/discussion/re-there-are-two-methods-you-could-use-t... suggests that I can do it either way. Any comments? Thanks.

[tagteam]

Yes, @comboardq, and I believe that is why Form 7203 came into existence.

[comboardq]

Thanks @tagteam for this info. Alternatively, would it be acceptable to track these dissallowed losses in the At Risk Wks - S and make sure To note the 0 basis so none of the losses are deducted, at least until basis is created from future income, or would you say that the shareholder basis worksheet is the only way to properly do it? And if the separate shareholder basis worksheet is the way to go, do you have any suggestions for how to input and note the offset income in TT? I haven't seen questions of that sort in the interview process...

[tagteam]

There are no questions in the interview (Step-by-Step) process since basis calculations are done outside of the program.

Frankly, I have no idea how to input the figures into TurboTax (so they are recorded going forward). I suppose you could use a 7203 and save your tax file as a PDF with the 7203 included.

[comboardq]

You say you don't know how to input the losses so they are tracked going forward, but do you have any guidance on how to input the figures at all -- at least in terms of inputing the offset income figure (even to 0) and then adding a reference or statement to show how that figure was derived? ...New TT user here 😉

[tagteam]

Are you referring to the worksheet? 

[comboardq]

I understand the shareholder basis calculations, but not sure how I would go about offseting the various k-1 incomes in TT in such a way that demonstrates why the income was offset. How is this done currently with form 7203 for example, as its the same thing but prior year. Does TT now track shareholder basis in '21?

[tagteam]

Yes, now that Form 7203 is available and incorporated into the product.

I will page @Mike9241 for the balance of this.

[why_AtRisk]

I totally understand your question because I find the same bug.  It took me days (wasting my precious time) to research and try.  Same here, my CPA did not use the form 6198.  This is an abc topic when a person brings in the 1120S into 1024.  So, I try the H&R Block instead.  Voila, problem solve! 

Turbotax is easier to use in general but after see all posts, now I can confirm that TT is not using the same practice as CPA does in this area which could ruin the whole product.  May be if the number bring in from their business software would handle differently?