User's Manual - Drake Software

Self-Employment Income (Schedule C)
Drake Software User’s Manual
Activity Type Codes
The program’s default position for investments (item 32b) is that all investments are at
risk. If this is not true for your client, select Some investment is NOT at risk. (Note
that item 32b includes a link to screen 6198 for entering data to compute deductible
losses for Form 6198, At-Risk Limitations.)
The program’s default inventory valuation method (item 33) is cost. If the valuation
method is not cost, select the correct method under Part III - Cost of Goods Sold.
Screen C offers two options for activity type (item G) and shows where on Form 8582,
Passive Activity Loss Limitations, the calculation flows, if applicable:
• Option B: Other passive activity (Form 8582, line 3, All Other Passive Activities)
• Option D: Not a passive activity (Default; does not flow to Form 8582)
The program default is option D, Not a passive activity. Select D or leave this field
blank if this is not a passive activity. Select option B to indicate a passive activity.
NOTE This drop list does not contain an option A or an option C.
Business Codes
Press
CTRL+SHIFT+S to
search codes.
To locate a specific business code, place the cursor in the Business Code box (field B)
and press CTRL+SHIFT+S. Enter a search term and click Go. All codes that include the
search term are displayed as shown in the example in Figure 5-15.
Tax Treatment Codes
Figure 5-15: Example of a business-code search on screen C
Double-click the desired code or select one and click OK or press ENTER.
Screen C contains a Special tax treatment code drop list (Figure 5-16 on page 111).
110 Tax Year 2012