K-1 shows loss. Cost basis=0,so can't deduct, but no indication of that in TurboTax "Schedule K1 At Risk Allocation Worksheet". Can I put carry-over loss here to benefit?

Forum|Forum|6 years ago
June 6, 2019
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TurboTax Deluxe Windows

Rick19744

Employee

Not understanding your comment "cost basis = 0".
Are you saying you have no tax basis in this entity?
Are you active or passive in the activity?

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

mfamAuthor

Yes, no basis and active. If I follow TurboTax instructions and put accumulated carry forward losses in the box shown in the image, my tax liability for 2017 decreases. Doesn't seem correct. Is it simply a matter of TurboTax not putting a proper qualifying statement on the Easy Step process (or whatever it is called)?

Rick19744

Employee

The problem is that you have checked the box that you are at-risk.
This means that you have tax basis and your losses are allowed.
As such, that is why when you include the loss it will decrease your tax liability.
You need to uncheck the "at-risk" question box.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

mfamAuthor

Rick,
The software does work as you suggest, but shouldn't there be a question to ask how much of my carry-forward losses are at-risk? Why would it assume that my cost-basis equals or exceeds the carry-forward?
I'm not comfortable yet.
Thank you,
Dave