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PostPosted: Tue Aug 04, 2009 1:15 am 
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Joined: Tue Aug 04, 2009 12:57 am
Posts: 2
Hi,

Few questions on 1120S...

Can the depreciation deduction cause an S corporation to report an income loss, or is the S corp allowed to take depreciation deduction only to offset positive income?

Also, what happens to the Alternative Minimum Tax that is calculated as a "Post 1986 depreciation adjustment" on Schedule K? S corps don't pay tax, so does the ATM affect the shareholders?

Thank you!


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PostPosted: Tue Aug 04, 2009 4:06 am 
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Joined: Tue Jun 02, 2009 3:26 pm
Posts: 451
Regular depreciation may be taken in full, even when it generates or increases a loss. It is the Section 179 deduction which is limited to offsetting positive taxable income.

The "Post-86" AMT amounts are passed through to the shareholders on the K-1.

Cheers!


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