Turbo is putting a check mark on my Sched C line 32a, but I do not have a loss.

Forum|Forum|6 years ago
March 7, 2020
1 reply
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The IRS instructions on SCHED C say "If you have a loss, check the box that describes your investment in this activity." It then goes on to say "If you checked 32a, enter the loss on Schedule 1 and on Schedule SE"

HOWEVER, I do NOT have a loss. And turbo is still checking BOX 32a.

I am tempted to ignore this, but since this checked box requires the filer to make additional entries on SCHED 1 and SCHED SE, won't this raise a red flag when those entries aren't made?

ColeenD3

You would still indicate whether or not all investment is at risk, even without a loss. All your Investment is at Risk (check Box 32a). It means you are using your own money for the business.

Your Schedule C amount do carry over to Schedule 1 regardless and you do pay SE tax, calculated on Schedule SE.

J

JayKeppsAuthor

Employee

The IRS says specifically "IF YOU HAVE A LOSS ...., check the box that describes your investment in this activity"

I am keying in on the phrase "IF YOU HAVE A LOSS". Why would you check any box if you DON'T have a loss?

A

AnnetteB6

The question about whether your investment is at risk is asked early in the Schedule C process. If you indicate that it is at risk, then the box is checked. That way, you can go about completing your Schedule C by entering your income and expenses without having to revisit the 'at risk' question every time another expense or income item is entered. The data is already there and TurboTax knows how to treat the loss, if there is one.

If there is no loss, then nothing additional would be reported on other forms and there is no harm in having the box checked indicating that all investment is at risk. This is not a red flag because there is no loss to be reported elsewhere.

@JayKepps

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