How should I be entering/documenting basis limitation on individual return for S-corp K-1. Client basis went negative this year, but I only see worksheets for passive activity and at risk loss limitation and no basis computation worksheet. Is there a basis computation worksheet (with calculated limitations)? If not what is everyone doing to work around this?
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How are you making Form 6198 work? I have the info filled in and in Part IV of 6198, ,it shows $-27,442 as deductible loss and $16,401 as amount at-risk at end of year. Yet the full loss of $39,944 is flowing to schedule 1. I cannot figure out how to make it only allow the loss up to their basis. What am I doing wrong?
Do you have a better method? I've researched this and from what I've found, ProSeries doesn't have a basis limitation worksheet and other users are using 6198 to calculate. How do you handle losses in excess of basis?
When filling out the K-1 worksheet, only enter the allowable amounts (up to the Basis). That is what the program would do if it had a Basis limitation worksheet.
Manually carry forward excess amounts and manually enter on future tax return when Basis is restored.
Ex: $6,000 carryforward loss from previous year - $5,000 Income from Line 21 on Form 1120S which is normally entered on Line 1 of Sch K-1. With the 80% limit on income, I can use $4,000 of that carryforward loss against the $5,000 income leaving $1,000 taxable income (which is then added to personal Form 1040 as shareholder income). The remaining $2,000 carryforward loss can be used for future returns.
My question....If we use only the "allowable loss" amount or "income minus allowable loss" ($1,000) on Line 1 of Schedule K-1, then it will not match Line 21 (Ordinary Business Income/Loss) on Form 1120S ($5,000). Am I missing something?
Not sure where to report the carryforward loss on Form 1120S or Schedule K-1. Or do we?