Include partnership/S-corp losses in loss_ald#7463
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PavelMakarchuk wants to merge 3 commits intomainfrom
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Include partnership/S-corp losses in loss_ald#7463PavelMakarchuk wants to merge 3 commits intomainfrom
PavelMakarchuk wants to merge 3 commits intomainfrom
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Partnership and S-corp losses (negative partnership_s_corp_income) were not being recovered via the business loss above-the-line deduction, silently inflating AGI. Add these losses alongside existing self-employment losses, subject to the same §461(l) excess business loss cap. Closes #7461 Co-Authored-By: Claude Opus 4.6 <noreply@anthropic.com>
…prove tests - Fix dc_self_employment_loss_addition to subtract partnership/S-corp losses when isolating the SE portion of loss_ald (prevents overstating DC addition) - Update loss_ald reference from §165 to §461(l) and §461(l)(4) - Rename tests to Case N convention with person1 naming - Add tests: joint filing cap, mixed positive/negative across people, capital loss interaction Co-Authored-By: Claude Opus 4.6 <noreply@anthropic.com>
The test has large negative partnership_s_corp_income. Now that loss_ald correctly recovers these losses (capped at $610K joint), the expected AGI changes from -$3K to -$610K. Credit output unchanged. Co-Authored-By: Claude Opus 4.6 <noreply@anthropic.com>
Codecov Report✅ All modified and coverable lines are covered by tests. Additional details and impacted files@@ Coverage Diff @@
## main #7463 +/- ##
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+ Coverage 70.60% 100.00% +29.39%
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Files 3896 2 -3894
Lines 56278 48 -56230
Branches 277 0 -277
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- Hits 39735 48 -39687
+ Misses 16542 0 -16542
+ Partials 1 0 -1
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Summary
partnership_s_corp_incomelosses to theloss_aldbusiness loss above-the-line deduction, alongside existing self-employment and capital lossespartnership_s_corp_incomewas clipped to zero inirs_gross_incomebut never recovered vialoss_ald, silently inflating AGITest plan
loss_ald: S-Corp loss only, combined SE+S-Corp losses, losses exceeding §461(l) cap, positive S-Corp income, and no lossesCloses #7461
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