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Disallowed Previous Year Carryover Loss from Basis Limitation

Forum|Forum|3 years ago
April 9, 2023
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I'm trying to report a carryover loss from a previous year that was disallowed because of basis limitation. The IRS instructions say to report this on schedule E Part II line 28i but TurboTax won't let me. How do I handle this?

Best answer by AliciaP1

If your activity in the business is not considered passive, then your basis limitation loss carryover is considered an at-risk loss carryover and needs to be entered into TurboTax as such.

To enter your loss carryover in TurboTax Online you can follow these steps:

Sign in to your TurboTax
Open or continue your return
- Choose a section from the TurboTax menu and select Pick up where you left off
Using the search bar, type K-1 and select the Jump to link from the search results
- Note: If the Jump to link doesn’t work, select the Federal tab, then under S-corps, Partnerships, and Trusts, select Wages & Income
- Select Revisit or Start next to Schedule K-1
Answer Yes to Do you want to review Schedules K-1 or Q? and follow the prompts
Continue through the questions until you get to the Describe the Partnership screen and mark I have at-risk losses carrying over from 2021
Enter your basis loss in the Carryover Prior Year Loss column in the section F line 4, on line 11 Self-empl health ins as a negative number

@LarryMars

PatriciaV

Employee

Schedule E Part II Line 28i reports current year non-passive losses. If you enter this as a negative number for Box 1 Ordinary Income or Loss during the K-1 interview, this amount will carry over to the line and column you mention.

You can enter this manually in Forms Mode on the K-1 Partner worksheet for this investment. Entries are allowed for boxes that are highlighted in yellow where the font is blue. If the font or box turns red, click the Errors icon above the forms list to see the error in the footer below the form.

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L

LarryMarsAuthor

It was actually a disallowed deduction due to basis limitation on the basis worksheet from last year. I am one of the partners in an LLC, and this carryover is my SE health insurance premium which I didn’t deduct last year. Is this a non-passive deduction and does it still get reported in same location?

AliciaP1Answer

If your activity in the business is not considered passive, then your basis limitation loss carryover is considered an at-risk loss carryover and needs to be entered into TurboTax as such.

To enter your loss carryover in TurboTax Online you can follow these steps:

Sign in to your TurboTax
Open or continue your return
- Choose a section from the TurboTax menu and select Pick up where you left off
Using the search bar, type K-1 and select the Jump to link from the search results
- Note: If the Jump to link doesn’t work, select the Federal tab, then under S-corps, Partnerships, and Trusts, select Wages & Income
- Select Revisit or Start next to Schedule K-1
Answer Yes to Do you want to review Schedules K-1 or Q? and follow the prompts
Continue through the questions until you get to the Describe the Partnership screen and mark I have at-risk losses carrying over from 2021
Enter your basis loss in the Carryover Prior Year Loss column in the section F line 4, on line 11 Self-empl health ins as a negative number