Can I enter and track basis for partners or shareholders in the individual return?
Yes, basis worksheet calculations are available in the 1040 package.
- Partner Basis and Debt Basis are entered on the K1P screen, on the tabs Basis Wkst and Basis Wkst (cont.).
- The Stock Basis and Debt Basis amounts are entered on the K1S screen, on the tabs Basis (7203) and Basis, cont. (7203).*
After you have entered the basis details, the program will track the adjusted basis, limit any losses based on the basis calculation, and carry forward to subsequent years the adjusted basis and any disallowed losses. Review the basis worksheets produced in view mode (Wks K1P/K1S Detail Adj Basis) for more detailed information. If you do not see basis worksheets in view mode after making entries on the K1P or K1S screen(s), check to ensure that the option has been enabled by going to Setup > Options > Form & Schedule Options > Print shareholder's/partner's adjusted basis worksheet.
For more information about limitations, see Related Links below.
*S corp K1 Notes
- Starting in tax year 2018, the IRS requires a basis computation to be attached to individual returns where the taxpayer is a shareholder in an S-corporation in which specific circumstances are met. See Related Links for further information.
- Non-deductible expenses only get carried forward if the taxpayer has made the irrevocable election to take losses and deductions before non-deductible expenses by checking the box on the K1S screen > Basis, cont. (7203) tab > E Regulation section 1.1367-1(g) election is in effect during the tax year for this S corporation.
- Per the field help: "Mark this box to make the election to decrease basis by losses and deductions before nondeductible items. A shareholder may elect to decrease his or her basis for a share of separately computed items of loss, and non-separately computed loss before reducing the basis for nondeductible, noncapital expenses, and the oil and gas depletion deduction. If the shareholder makes the election, to the extent the nondeductible, non-capital expenses, and the oil and gas depletion deduction exceed the shareholder's basis, these items reduce basis in the following tax year."
- In prior years, this option was Elect to take losses and deductions before non-deductible items.