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Article #: 13824
Screens 3800 (General Business Credit) and GBC (General Business Credit Carryovers) have been redesigned to simplify data entry of business credit carryforwards and carrybacks. Screen PACR (Passive Activity Credit Carryover) has been removed.
Pass-through business credits from partnerships, S corporations, trusts, or 1099-PATR that are supported by Drake Software are entered on K1P, K1S, K1F, or PATR screens, as appropriate.
Credits that are not supported by Drake Software can be entered on screen 3800 in either the Nonpassive or Passive columns. Returns with these credits cannot be e-filed.
General Business Credit Carryforwards and Carrybacks are entered on the GBC screen.
Choose a credit from the Description of credit list. Press Page Down to enter each additional credit.
Carryforward amounts flow generally to Part I of Form 8582-CR, line 4 (which flows from Part III of Form 3800), and to any corresponding worksheets. The 8582-CR worksheet names begin Wks CR.
Form 8582-CR
Form 8582-CR, Passive Activity Credit Limitations, is used by noncorporate taxpayers to figure the amount of any passive activity credit (PAC) for the current tax year (including any prior-year unallowed credits) and the amount of credit allowed for the current year. It also is used to make the election to increase the basis of credit property when a taxpayer disposes of their interest in an activity.
PACs that are not allowed in the current year are carried forward until they are allowed against the tax on either net passive income or the special allowance, if applicable. Screen CR is available on the first Credits tab of the Data Entry Menu.
Important There is no direct data entry for Form 3800 in Drake Tax for Form 1065 (Partnership) or Form 1120-S (S Corporation) returns.
For these return types, the information required by partners or shareholders to complete Form 3468 on their individual returns is reported on K-1 Form 3468.
Form 3800 is only applicable at the partnership or S corporation level when an elective transfer credit is involved. This scenario is not currently supported in Drake Tax.
EF Message 5698
EF Message 5698 generates if, on screen GBC, the total of the “Amount of original credit previously used” and the “Amount of original credit carryback” is equal to or greater than the “Original Amount.” To clear this message, open screen GBC and review data entry. If the “Original Amount” has been completely used, press Ctrl+D to delete the screen for this credit.
EF Message 5699
EF Message 5699 generates if the year in which the credit originated has not been entered or is invalid. To clear this message, review data entered on the GBC screen for credit carryovers Codes C & G. If there is no amount left of the original credit, use Ctrl+D to delete the GBC screen for this credit.