Anthony C
Level 1

I have an S Corp with husband/wife shareholders with 50/50 stock ownership.

Basis schedule was created for 2018 and 2019 but should have had K-1 Ordinary Income losses suspended due to basis limitations, about $30k each after 2019. 

Question is, recognize that amount as a capital gain in 2020 or is this just a basis adjustment with no recognition of capital gains?

Not to complicate any further its S Corp with rentals, no W2 paid, and they want to revoke the S Corp at the end of 2020. 

Thanks for your help!

 

 

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