K-1 from 1120S in ATX

[Laurie P]

Hi all,

I have a K-1 from an 1120-S. Previous 2 years had enough profit to claim the current year's loss on the 1040 (i.e. enough basis). Where in the world do I indicate this in ATX so that the loss from the K-1 flows to the 1040 Page 1? I can not figure out. I do have it marked as passive which I thought is correct. I know if I uncheck it will flow. Are there any other options? Thanks.

Laurie

[OldJack]

Each year of a S-corp "ALL" income or losses passes through to the individual on the K1. Therefore, prior years do not show anywhere on the 1120S-k1. The determination of loss allowed or disallowed is determined at the individual 1040 level. Therefore, the fact that you had taxable profits on the k1s and 1040s in prior years has no relationship to the current year loss other than those profits added/increased the individual shareholders basis for claiming the current year loss. Of course, if the shareholder withdraw those prior year profits, then his basis was reduced and you may not have basis to allow deduction of the current year loss. If you can't deduct the loss this year it carries over for possible deduction in the next or future years. Use the tab for basis on the K1 in the ATX program and you may need to look at the at-risk form 6198 at the individual level.