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S Corp distributions in excess of basis and loss carryover

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Level 3

My apologies if this is posted twice. I sent a question last night but I don't see it posted nor did I receive an email confirming my question was received.

My client received an 1120-S K-1 that actually has the basis statement attached. It shows $41K distributions in excess of basis, $0 basis, $4K debt basis and $33K loss carryover.

I am guessing that I should trust the $41K distributions in excess of basis is the number after considering debt basis. However, I would think if debt basis were considered then debt basis would be zero.

I know the $33K loss carryover needs to reduce the operating loss to zero on the 1040 K-1 wks. Also, the $41K distributions in excess of basis also needs to be reported as LTCG on Sch D.

However, does the $41K get reduced by the $33K loss not able to be deducted and only $8K LTCG is reported? It seems as though the client is getting hit twice for the same issue if I don't allow the loss AND report $41K LTCG for distributions in excess of basis.

Thanks for your help.  

 

 

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Level 12

"I sent a question last night"

You are posting to the internet. Nothing got sent anywhere. This is a discussion board. I don't see that there is any similar topic started by you, though.

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Level 12

@david3 

There is no need to keep asking. Your original question right here is available to any peer user that can help and has the time to help. Remember, everyone is a bit busy today  🙂

 

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Level 3

My apologies. Your previous answer indicated that nothing got posted and that I sent my question on the internet to some discussion group. I wouldn't have sent my question again had I not received that answer.

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Level 12

I did not find any Similar Question asked by you, until this morning when you asked it again. And you will get answered when one of the volunteer peer users is able to help, or if an Intuit person can be helpful, but since this is not a Customer Support forum, you rely on your peer users.

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Level 12

Have you tried the Search here, or through google:

https://proconnect.intuit.com/community/forums/searchpage/tab/message?advanced=false&allow_punctuati...

 

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Level 3

Yes.

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Level 10

I've seen too many K-1s with incorrect basis to blindly rely on them.  You should have a basis work paper that goes back to the original purchase.

What's funding the losses and distributions?

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Level 3

The S Corp isn't my client but usually debt funds the losses and distributions.

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