Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

S-Corp Loss Carryforward - Departing Shareholder

Kevin1
Level 2

S-Corp had a loss that exceeds shareholder basis, so that shareholder has a loss carry forward on Form 6198.   The shareholder has decided to walk away from the company.

Is the deductibility of the loss completely gone for the shareholder?   What other implications are there?

0 Cheers

This discussion has been locked. No new contributions can be made. You may start a new discussion here

1 Best Answer

Accepted Solutions
itonewbie
Level 15

What do you mean "walk away from the company"?  This is an s-corp.  The taxpayer still has shares held in that s-corp. If the taxpayer establishes stock or debt basis in future years, those suspended losses may still be allowed.  If the taxpayer disposes of the shares, those suspended losses will be gone.

---------------------------------------------------------------------------------
Still an AllStar

View solution in original post

0 Cheers
1 Comment 1
itonewbie
Level 15

What do you mean "walk away from the company"?  This is an s-corp.  The taxpayer still has shares held in that s-corp. If the taxpayer establishes stock or debt basis in future years, those suspended losses may still be allowed.  If the taxpayer disposes of the shares, those suspended losses will be gone.

---------------------------------------------------------------------------------
Still an AllStar
0 Cheers