6198 Equivalent?

Technical topics regarding tax preparation.
#1
NYCCPA  
Posts:
196
Joined:
23-Apr-2021 5:11pm
Location:
NY
S Corp is a Partner in a Partnership. 2020 K-1 shows a loss of $50k, basis is only $30k, so there is $20k that must be carried forward, Is there a Form to report the loss limitation on for Entities? If not, do I just report the limited amount and just have to keep track of it outside of the tax software?
 

#2
Posts:
1362
Joined:
22-Apr-2014 9:07am
Location:
Chicago, IL
Depends on your software. I've seen people use the 6198 but I wouldn't. Just create a basis worksheet in Excel as well as an allocation worksheet if there are different types of suspended losses. You're going to need to attach that to a future return anyway when the losses are freed up.
 

#3
Posts:
6043
Joined:
22-Apr-2014 3:06pm
Location:
WA State
I had a colleague at a prior firm who went crazy completing 6198s for every client with any need to track basis. That's NOT the purpose of Form 6198 (a VERY poorly drafted form, IMO). More importantly, if you suspend losses due to lack of "economic" basis, but tell your software they are suspended because of a lack of "At-Risk" basis (on Form 6198), you will likely end up with software that doesn't carryforward those losses properly and/or unlock them properly when you do end up with basis.
~Captcook
 


Return to Taxation



Who is online

Users browsing this forum: Google [Bot], SlipperyPencil and 107 guests