K-1 and New Form 7203 - Allowed Loss?

Forum|Forum|3 years ago
April 13, 2022
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Hi. I'm still reading up on Form 7203. I was surprised to encounter it in TurboTax this year. I think I put in my income and loss correctly from the K-1 but I have not yet figured out how to do all the basis details 😞 I'm hoping you can help me understand this screen:

It comes near the end of the K-1 review. The value in "Allowed Loss" ($4,069) is the income for my business and the value currently in "K-1 Amount to Adjust" (-5,679) is my expenses. Unfortunately, this year, I had a loss. I don't understand why the "K-1 Amount to Adjust" field is editable. Am I supposed to change it? Is it implying that it should not exceed the "Allowed Loss"? I doesn't make a big difference in the end result but I want to understand it.

Anyone know what's expected?

I'm still researching 7203 so forgive me if it's an obvious question.

Thanks.

Benny

Best answer by PatriciaV

Yes, the K-1 number can't be more than the Allowed Loss. If you enter the same number for both, this should be resolved.

PatriciaV

Employee

Because your allowed losses exceed the reported K-1 losses, you need to enter no more than the allowed losses for this entry. Note this affects Form 7203 only; you are not changing your K-1 entries.

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Benny HAuthor

Actually, my true expenses in the "K-1 Amount to Adjust" (-5,679) exceed what is listed in "Allowed Loss" ($4,069). So, I should change the "K-1 Amount to Adjust" to equal the "Allowed Loss" (I.e., "-4,069"). Is that what you meant?

Thanks.