Final k-1 2019, in 2020 still wants me to declare k-1 in order to roll forward carry forward 4797 losses

[dbtaxsolutions]

So, I am preparing a 2020 tax return, that has carry forward amounts to losses from 4797. It seems that it's linked to  s Corp k-1, which there should not be any k-1 because s corp was closed out in 2019. However, if I delete the k-1 because we do not have actual k-1 then the loss carry forward that is unused disappears. I have tried to work with proseries agent to find a way to re enter it without having  a k-1 but no avail. 

Is it ok to just keep the k-1 there just for the rollover purposes even though there is no actual k-1? I think not, but how else to show carry forward amounts?

Thanks for any help.

[Just-Lisa-Now-]

You must have forgotten to mark the 2019 K-1 as Final and pick up those losses last year?

[sjrcpa]

If those losses could not be used in 2019, they are lost. No reason to have them rollover to 2020.

If they are unrecaptured 1231 losses, they should remain to offset any future 1231 gains. There should be a separate place you can enter them in the software, unrelated to a K-1.

[dbtaxsolutions]

The proseries and I revisited 2019 and it was definitely marked final. 

We also tried to look where to enter the carry forward outside of k-1, was not successful after 45 min.;

I understand it cannot be applied to 2020 at this year's tax return, but it should remain as carry forward to next year and not completely disappear if i delete the k-1 that should not be there. I feel like this is a glitch?

[dbtaxsolutions]

It was marked final in 2019.

[sjrcpa]

Are they unrecaptured 1231 losses?

Or something else?

[dbtaxsolutions]

they are from form 4797 loss on sale of business assets back in 2018

not used in 2019, neither in 2020, but it does not seem to carry forward without the k-1 attached. I entered it manually to 1231 loss from prior year  worksheet and even that does not show up on form 8552.

[sjrcpa]

One more time:

Are they unrecaptured 1231 losses?

Or, why weren't they used in prior years?

What's an 8552?

[dbtaxsolutions]

8552 is passive activity loss limitation

section 1231 losses pass through (s corp)

[abctax55]

Form 8582.... not 8552.

[sjrcpa]

OK. I think they are unrecaptured 1231 losses. That is, in 2018 there were net 1231 losses. They get carried forward for 5 years to offset any 1231 gains (ie to make them get treated as ordinary gain and not capital gain) Where would you enter these if you had a new client?

Is there a carryover section?

Is there a spot in the Schedule D section?

I don't use ProSeries so I'm guessing.

8582 is the passive loss carryover form. These do not belong there.

[abctax55]

I'm not even sure where in Lacerte you enter it....that's why (1) I love the rolling over from year to year so it populates and (2) another reason to not accept new clients 🙂

[abctax55]

Screen 17, under Carryovers/Misc Info.

@dbtaxsolutions  - look for it where ever you'd enter Dispositions.

[sjrcpa]

I knew the Lacerte answer, from past experience. I was hoping ProSeries was comparable.

[abctax55]

I vaguely remember having to look for it a few years ago...