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Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.

Question

Why doesn’t Schedule K-1 reflect the amounts limited by the shareholder’s basis in the S Corporation?

Answer

Based on the Shareholder’s instructions for Schedule K-1 (Form 1120S), the amounts shown on Schedule K-1 reflect the shareholder’s share of income, loss, deductions, credits, and other items without reference to limitations on losses, credits or other items that may have to be adjusted because of any of the following.

• The adjusted basis of the shareholder’s stock and debt in the corporation.
• The at-risk limitations.
• The passive activity limitations.
• Any other limitations that must be taken into account at the shareholder level in figuring taxable income.

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