942

[#1]

California Form 6198 At-Risk Recapture Rules were not applied...  Can anyone shed some insight into this diagnostic?

..............This will not prevent e-fling of the return. If the return looks correct to the customer,you can ignore it.

[Strongsilence-CPA]

10/24/22

Problem:  Form 6198 lists a negative amount in Line 19a and no amount in Line 19b

Diagnostic.  Diag 942 says California Form 6198 At-Risk Recapture Rules were not applied.

Analysis. See IRS Pub 925.  Did the taxpayer deduct losses in any prior year? 

Answer: No (In my case. YMMV)

Solution: In Screen 20.2, input -1 in Box* 156.  (There is no need to enter -1 in the CA box adjacent to this one to clear the diagnostic.)

Epilogue:  This diagnostic presents one of those valuable moments for learning Form 6198 and at-risk rules.  I advise learning rather than a quick fix.

*Intuit uses the term code, which I think is vestigial. It probably served a purpose for programmers BITD. Now, the term box is more descriptive as tax preparers don't code, we input numbers to boxes.