Prior Year suspended loss from sch E2

[Rookydb]

I have a client that has prior suspended loss from 1120-s k1 of -71k.  This year the company had ordinary income of 94k but they took 54k in distributions.  Form 7203 shows that the shareholder has basis to take 40K of prior year loss.  However, Sch E is showing PYA of -71k.  I have called proseries last week and again today and they tell me I need to override the numbers on Sch E.  Am I thinking about this correctly?  or is there an issue with proseries programming?  If I override there doesn't seem to be any way to get the remaining 31k of suspended loss to carryover.  Am I wrong in believing that the suspended loss should be limited?

[dkh]

I agree with your thinking that there should be $31k suspended loss.  Supports answer to override is unacceptable. 

[rbynaker]

Does ProSeries track losses in excess of basis now?  I know it was always a manual adjustment prior to the invention of the 7203.  So, while I agree this is unacceptable, it's no more unacceptable than it's been in prior years. 🙂

[dkh]

@rbynaker .. thanks for setting me straight.   I was not reading correctly.

@Rookydb  you have to enter two K1s.   one with current year income and one with the allowable loss

then your Sched E will be correct  and will match your loss carryover on 7203.

Although... I stand behind my statement that it is unacceptable for support to suggest "override" is the way to correct the program

[Rookydb]

thank you..I will give that a try

[TaxGuyBill]

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@Rookydb wrote:

However, Sch E is showing PYA of -71k.

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If you didn't enter that, where is that coming from?

You didn't use Form 6198 to limit the loss due to Basis last year, did you?

[Rookydb]

Yes it was limited in 2021 by Form 6198

[TaxGuyBill]

Form 6198 is for At-Risk limits, not Basis limits.  So you should not have used that form last year to limit Basis.  That is why the program is showing that now, so you need to delete that information from the 6198.