In a case where the taxpayer’s share of the ordinary loss reported on a K-1 from an investment in an S-Corp. exceeds his basis, the section titled “Disallowed Smart Worksheet” at the bottom of form 6198 does not populate automatically, even if the beginning of the year basis is reported in both the Simplified Computation and the Detailed Computation sections of form 6198. It appears that you must “override” the fields in the “Disallowed Smart Worksheet” to limit the loss. Is there a way to get the fields to populate automatically, so you do not have to “override” any fields in the tax return?
@Glenn Z wrote:
exceeds his basis, ... form 6198 does not populate automatically
Although I realize that some people use Form 6198 as a work-around, that form is NOT used for limiting Basis. That is for At-Risk Limitations, NOT Basis Limitations. So that may be why it is not populating automatically.
In ProSeries, you need to limit Basis manually. Only enter the amount of the loss allowed (if any) and MANUALLY carry over any excess losses.