Glen Birnbaum, CPA pointed out on Twitter on February 15, 2019 an item referenced in RIA’s Federal Tax Update the same day regarding a new check box has appeared on Schedule E of Form 1040 that applies to S corporation shareholders. The IRS posted information about this change on its website in an article titled “Clarification on line 28, column (e), of Schedule E (Form 1040)” on February 6, 2019.
The page provides:
As stated in Part II of the Schedule E (Form 1040), a taxpayer who owns an interest in an S corporation and reports a loss, receives a distribution, disposes of stock, or receives a loan repayment from the S corporation must check a corresponding box under line 28, column (e), and attach a computation detailing their S corporation basis. The discussion about basis rules for S corporations in the Instructions for Schedule E (Form 1040) for Parts II and III does not limit or modify this requirement.Read More