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k-1 loss

ayavari
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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ayavari
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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9 Comments 9
Just-Lisa-Now-
Level 15
Level 15

Is it unallowed?  Look for Form 8582.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
ayavari
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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Just-Lisa-Now-
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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ayavari
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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Just-Lisa-Now-
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♥¸¸.•*¨*•♫♪
ayavari
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

Just-Lisa-Now-
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♥¸¸.•*¨*•♫♪
abctax55
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?

"*******Tax software is no substitute for a professional tax preparer*******
( Generic Comment )"
mdtao31
Level 7

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