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Accounting & Bookkeeping & Small Business Forum
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RKoehler
Joined: 30 May 2006
Posts: 11
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| Posted: Tue May 30, 2006 12:00 pm Post subject: Shareholder loss limitation |
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Help, please :oops:
I am doing a personal return for a 100% shareholder in an S-Corp. The CPA who did his 1120S shows a loss (say $8,000) on his K-1. Now please refresh my memory - he can only take the loss to the extent of his basis in stock - correct? So, say he has $12,000 in stock and the corporation's loss last year was $11,000. Then his end of year 2005 basis in stock would be $1,000 and he will have to carry forward $7,000 in losses? |
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BillBro
Joined: 23 Mar 2006
Posts: 51
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| Posted: Fri Jun 02, 2006 12:49 pm Post subject: |
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| Your memory is fine! A shareholder can recognize pass-through losses and deductions only to the extent of his basis in stock. Unlike a partnership, S corp liabilities do not increase a shareholder's basis. |
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RKoehler
Joined: 30 May 2006
Posts: 11
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| Posted: Sat Jun 03, 2006 10:12 am Post subject: Shareholder Loss Limitation |
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| Thanks so much for the response :lol: |
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