"Claiming a loss greater than your basis" error message

knightcastle44
knightcastle44 Member Posts: 1 Newcomer
in Filing my taxes

I completed inputting my S- corporation information with my K-1 when I received an error message that states the following: "We don't support your return. Unfortunately, we don't support your return because you're claiming a loss greater than your basis. This means the losses you can claim are limited, and we don't support this situation. You'll need to file with another service." As a reference, my basis is 2777, my loss is -3042, and my suspended at risk limitation loss is -265. Can I limit my loss to just -2777 on my form and if so, how? How can I get this fixed and continue to file with freetaxusa.com? Any help would be greatly appreciated. Thanks!

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Answers

  • GeorgeM
    GeorgeM FreeTaxUSA Agent Posts: 86 image
    Hello knightcastle44:

    Unfortunately, because your reported loss is greater than your S Corp basis, that is a tax situation our software does not currently support. Moreover, we cannot recommend that your proposed solution is an acceptable work-around.

    Generally, a Yellow Alert of the type you are seeing is more advisory and would not prevent a customer from e-filing their tax return; however, in your situation, because our software is not currently set-up to properly report your loss limitation for 2025, and the amount suspended for future tax years, we have to recommend that you use another tax service.

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