Form 3800 problem

[joanmcq]

Hey all,

I'm clawing up from the dark depths of the complicated crap I'm currently wallowing in! I have a return where the client has a 'increasing research credit' that should flow from the 1120-S K-1 to the Form 3800 (I think). This is the first year she has the S-corp. the S-corp had a loss from biz activities (but some investment income), she does not materially participate, so it is a passive activity, and she has no taxable income on her return.

Sigh. I know the credit will be carried forward, but although it is showing up on lines 37 & 38 of the 6765, nothing carries to line 1c of the 3800, nor to the c/f worksheets. Anyone know what I'm doing wrong, if I'm doing anything wrong? Does the form simply show zero, and the c/f worksheets are all that is necessary? :dunno:

[Margaret CPA in OH]

The credit on the 1120S goes to 6765. The 3800 (or 6765, read instructions) in on the shareholder return. You may or may not have to also file 6765. I have a client S-corp for about 10 years with this issue and have filed as described. Unfortunately, the shareholder cannot utilize the credit because he makes too much so we carry over and over and over for 20 years.

[joanmcq]

The credit on the 1120S goes to 6765. The 3800 (or 6765, read instructions) in on the shareholder return. You may or may not have to also file 6765. I have a client S-corp for about 10 years with this issue and have filed as described. Unfortunately, the shareholder cannot utilize the credit because he makes too much so we carry over and over and over for 20 years.

The input says to put it on the 6765 where it does show up. This client is making too little income, but this is the first year the company ran a loss, and I expect large amounts of income in the future. She got the shares in her divorce. The instructions to the 3800 are not the clearest, and I was unsure as to my input in ATX. Thanks for replying!