Other Tax Questions
Questions and comments on other topics covered in Fairmark.com, such as UTMA accounts, and any tax questions that don't fit our other categories.
Turbotax K1 suspended deductions help
Posted by: jcdoc107, April 1, 2017 07:51PM
I have values in box 11 (section 179 deduction) and box 12 (other deductions). I was informed buy our group CPA that these are suspended deductions that will carryover to 2017. However, Turbotax asks for the values in box 11 and 12 and applies them to 2016. I can't for the life
of me figure out how to suspend them and apply them to next year using interview mode or form mode. Does anyone know how to handle this?

Re: Turbotax K1 suspended deductions help
Posted by: jimfrombx, April 29, 2017 08:01PM
I realize that April 18th has come and gone.
However, all you have to do is enter the figures into
the appropriate lines in Turbo tax and it will handle
the items correctly. Negative numbers will likely
be suspended, unless there is an income item to allow
it to be netted. Positive numbers are income and will be reported/included in the current year return.
I have had a number of these items over the years
and Turbo Tax handles them.

Re: Turbotax K1 suspended deductions help
Posted by: Snargle, May 3, 2017 04:49PM
Did your "group CPA" give you any hint as to *why* these deductions might need to be "suspended" until next year?

Lack of tax basis? Lack of at risk? Lack of business income? Passive activity limitations?

Re: Turbotax K1 suspended deductions help
Posted by: jcdoc107, May 3, 2017 05:30PM
Snargle Wrote:
-------------------------------------------------------
> Did your "group CPA" give you any hint as to *why*
> these deductions might need to be "suspended"
> until next year?
>
> Lack of tax basis? Lack of at risk? Lack of
> business income? Passive activity limitations?


When asked I was basically told that's what his tax software did with the deductions after entering my basis for the s corp, which was 0 at the end of the year. Turbotax gave me the deductions so I just took them.

Re: Turbotax K1 suspended deductions help
Posted by: Art, May 3, 2017 08:09PM
I would strongly advise against accepting a tax preparer's "The software made me do it" as a valid explanation.

In this case, apparently basis was reduced to zero, something I do not see every day, and anything that would tend to reduce basis below zero would be treated as realized capital loss, not suspended gains. So keep asking and insisting on a true answer, or consider a new tax preparer.



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