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Sub s program calculates allowable loss (basis worksheets) when current year operating loss exceeds basis. However, k-1 for each shareholder still shows total loss for the year. What to do?

richard64
Level 2

At risk worksheets don't allow fields to be populated  Form 6198 calculates correct allowable loss but k-1 -line 1 ordinary loss still has total loss (same as 

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richard64
Level 2

Bingo!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! - I had all investment at risk checked.

It worked

You're the best

 

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11 Replies 11
dkh
Level 11

The K1 will show the total loss. Each shareholder needs the basis worksheet to limit the loss on their personal tax return  thru Form 6198  which will flow to Sched E page 2

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richard64
Level 2

Thanks again for your help.  6198 calculated the correct allowable loss but Schedule E page 2 still shows the full loss as reported on K-1 part III on line 1. Very frustrating to see how pro series left us hanging. Their customer help associates are stymied as to figuring this out. Meanwhile it's up to pros like you to figure it out. Any additional help will be appreciated.

  

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dkh
Level 11

have you check the box in Part II of K1 ---Some Investment Not at Risk?    

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richard64
Level 2

Bingo!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! - I had all investment at risk checked.

It worked

You're the best

 

View solution in original post

dkh
Level 11

Hooray!!!!     Glad I could help.

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TaxGuyBill
Level 14

@dkh wrote:

 Each shareholder needs the basis worksheet to limit the loss on their personal tax return  thru Form 6198  which will flow to Sched E page 2


 

I realize many ProSeries users use Form 6198 as a work around, but Form 6198 is NOT supposed to be used for Basis limitations.  That is for At-Risk limitations.

The proper way to do it is to manually calculate the allowable loss, and only enter that on the K-1.  Then manually carry forward any unused losses for when Basis is restored.

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dkh
Level 11

I stand corrected.   Thank you @TaxGuyBill   

 

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richard64
Level 2

ok - thanks. So the K-1, line 1 for the 1040 will be different than the K-1, line 1 on the Sub S return?

 

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dkh
Level 11

per @TaxGuyBill  - yes.      I used the Form6198 for several years for a client that had unallowed losses.  The program tracked my unallowed losses, only allowed loss was reported on return.......

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richard64
Level 2

ok - thanks. So the K-1, line 1 for the 1040 will be different than the K-1, line 1 on the Sub S return?

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richard64
Level 2

ok - thanks. So the K-1, line 1 for the 1040 will be different than the K-1, line 1 on the Sub S return?

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