Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.
The balancing entry is recorded in Schedule M-1 on page 5 to reconcile the tax return loss to the book loss. This should then resolve the issue. Also be sure to check the box on page 4 line 11 to waive the loss carry back period.
It belongs in Schedule M-1 line 3. You may need to over ride the TurboTax software to get this entered. The problem you have encountered is that software, to be affordable, cannot take into account every situation. Most, however, do provide an over ride feature. If you are not successful with this you will need to contact TurboTax customer support. Here is a link to help you reach them if necessary.
Just having this limited information it is difficult to answer you with any assurance. Please provide the following information:
Book net income without the capital loss
Book income after the capital loss
Retained earnings beginning of year
Any adjustments to retained earnings during the year
Retained earnings at year end
Any non deductible expenses or non taxable income
Dividends paid during the year
Having this I should be able to assist you.
The problem is that you are entering the capital loss in the as a positive rather than as a negative. Change the sign on this entry and it should be corrected. Also retained earnings at year end will be as follows:
Beginning of year balance 105
Profit (w/o capital loss) -3738
Capital loss -3310
End of year retained earnings -6943
I do not see how you have determined year end retained earnings to be -7048, This is a difference of 105. Perhaps you have not taken the opening retained earnings into the equation correctly because that is exactly the difference. After you try this, put it all aside for a day. Sometimes when we deal with a math problem for too long we start to see errors as being correct. It happens to accountants too.
The loss limitation has no bearing on this.It is just a math problem.
Quickbooks is not a bad program but there are other low cost tax prep programs with, perhaps, more flexibility than TurboTax.Take a look at www.taxact.com One more pointer, if assets and revenues are less than $250,000 you are not required to submit balance sheets or schedules M with the return. Perhaps you can overcome your problem with that exception.
Otherwise please put this aside and we can get back to it tomorrow. Then things will be clearer and you will be flustered by this.