Schedule K-1 (Form 1120-S) - Loss Limitations

While the at-risk limitations are calculated on IRS Form 6198 

At-Risk Limitations and the passive activity limitations are calculated on IRS Form 8582 Passive Activity Loss Limitations, there is not an IRS form for the potential limitations on the amount of corporate losses that you may deduct based on your basis in the corporation. You would need to enter only the loss allowed on Line 1 of the Schedule K-1, and then manually track the shareholder basis and the amount not allowed in the current year which could be carried forward to the time when the basis in the S Corporation allows the loss to be taken.

IRS Shareholder's Instructions for Schedule K-1 (Form 1120S), page 2:

Limitations on Losses, Deductions and Credits

There are potential limitations on corporate losses that you can deduct on your return. These limitations and the order in which you must apply them are as follows: the basis limitations, the at-risk limitations, the passive activity limitations, and the excess business loss limitations.

Each of these limitations is discussed separately in the instructions.

To navigate to the Worksheet for Figuring a Shareholder's Stock Basis:

  1. From within your TaxAct Online return, click Print Center in the left column.
  2. Click Custom
  3. Check the box(es) to the left of what you wish to print (the top section contains individual forms or schedules and the bottom section contains documents or worksheets). You may need to scroll down in the section to locate the item.
  4. Click Print and then click the PDF link. Click the printer icon or the save icon (available when you hover your mouse over the bottom of the PDF form) to print or save the PDF copy.

NOTE: If you see a message indicating you have not paid your return fees, click the View/Pay link, which will direct you through the Paper Filing steps. Continue through the screens until you have processed the payment for your product fees and then repeat the steps to print. 

  1. Start your TaxAct Desktop program
  2. Click the Forms button in the top left corner
  3. Expand the Federal folder and then expand the Worksheets folder
  4. Scroll down to the worksheet Schedule K-1 - Shareholder's Basis Worksheet
  5. Select the specific Shareholder Stock Basis Worksheet needed