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k-1 loss

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Level 2

I have a K-1 loss of $11,228. It does not show up online 7a f 1040 (from Schedule 1, line 9)as a deduction to lower my taxable income. Please help or explain what I am missing? Thank you, Steve

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Level 2

Thank you so much! That was the problem. I had not checked the box"materially participated", now, I did and everything is verything is fine now. It shows the loss of 1040 under other income. Much appreciated. Steve

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Level 15
Level 15

Is it unallowed?  Look for Form 8582.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 2

Hi,

 

Thank you for a quick response, however, this is K-1 loss from an S-corp not from schedule E, passive activity loss?

Can you explain a bit more?

 

Thank you,

 

Steve.

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Level 15
Level 15

So you have a negative amount on Line 1 of the K-1?  Did you materially participate in the business?


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 2

Yes, of course. Aren't I supposed to reflect my K-1 loss from my S-corp on my 1040 and take the deduction to lower my taxable income? Isn't it the reason why we establish S-corps? Thank you.

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Level 15
Level 15

I have no clue what your role in the S-Corp is.

Did you mark the materially participated box next to Line 1 of the K-1 worksheet?


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 2

Thank you so much! That was the problem. I had not checked the box"materially participated", now, I did and everything is verything is fine now. It shows the loss of 1040 under other income. Much appreciated. Steve

View solution in original post

Level 15
Level 15

It shouldn't show as a loss in "Other Income", it should be on Sch 1, Line 5.

And your previous comment "Aren't I supposed to reflect my K-1 loss from my S-corp on my 1040 and take the deduction to lower my taxable income? Isn't it the reason why we establish S-corps?"


Establishing an S-Corp for losses seems like alot of work for no reason...you could have had a loss on Sch C just the same.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 15

"...Isn't it the reason why we establish S-corps?"  No, it isn't.  It's for liability protection and possible savings on SE tax.   

How was this 'loss' generated?  

WAS a W-2 generated?

ARE you a professional tax preparer?

Former Chump... umm.... AllStar.
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Level 3

steve did you list it as "passive" or material participation?