TurboTax Business Interview does NOT ask about Capital Contributions made by shareholders

Forum|Forum|5 years ago
March 25, 2021
2 replies
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I have now completed an S-CORP tax return in TurboTax Business (i.e., the desktop software program), for tax years 2015, 2016 & 2017. Throughout this process, I have discovered that the software program DOES NOT ASK ABOUT, nor does it keep track of any Capital Contributions (i.e., increases, Paid-In-Capital) made by shareholders during the tax year as it should. By not asking about the Capital Contributions, the Stock and Loan Basis Information Worksheet is INCORRECT which in turn, makes the Shareholders' Basis Statement AND the Shareholders' Basis Report INVALID.

Now I am beginning to wonder if I made the correct choice in using TurboTax Business software to complete these S-Corporation tax returns...

If anyone out there has used TurboTax Business software to prepare your 1120 or 1120S tax return, I highly recommend that you recheck the shareholder basis that you have reported to the IRS as it may be incorrect, necessitating the need to amend your tax returns.

RESOLUTION

To resolve the issue above, it will be necessary for you to switch to Forms mode and manually enter the amount of Capital Contributions made by each shareholder on the Stock and Loan Basis Information Worksheet for each shareholder individually. This will automatically update the rest of the forms and the shareholder basis reported to the federal government (after you amend). 😲

TurboTax Business Windows

Anonymous_

Employee

TurboTax Business contains four modules; 1120, 1120-S, 1065, and 1041.

As a result, the program is jam-packed with code and many operations are not included in the Step-by-Step process and, instead, have to be entered in Forms Mode.

Most professional tax preparation software is similarly forms-driven which requires familiarity with the entire income tax preparation process for a particular type of entity.

Regardless, thank you for pointing out entries for which users need Forms Mode.

starting2makecentsAuthor

@Anonymous_, Thanks however, no one EXCEPT for Intuit/TurboTax Business should be responsible for pointing out entries for which users need to use Forms Mode. The shareholder section should make the user aware of the necessity when entering the other shareholder related information such as Shareholder Distributions AND Loan Repayments; both of which are clearly and correctly asked about during the interview. At minimum, there should be a link to the local help file which provides the necessary instructions to the user regarding Capital Contributions entry in Forms Mode.

Anonymous_

Employee

@starting2makecents

I do not disagree, but then you must realize that the information to which you refer is not required of all users (see requirements for completing Schedule L).

Further, individual shareholders should be keeping track of their contributions and any other items that affect their bases outside of TurboTax.

Jeffreystone1411

I’ve come across this exact issue which is why I now get to spend my night filing amendments, it’s ridiculous that it was not apart of the step-by-step process nor noted in any way. And this guy arguing otherwise annoys me deeply. Get it together TurboTax.

Anonymous_

Employee

My argument is, essentially, based upon a comparison to other DIY business income tax preparation products and the primary component is simply that if users can find a better, more comprehensive DIY program, they should buy it.