My wife and I started a new business this summer. we set up as a S corp. The business lost money in year one (planned). I am now starting to do our taxes and I'm not clear on requirements of shareholders / employees in order to claim a loss on our personal taxes. My wife draws a reasonable salary from the business, I do not, but I do a good deal of work for the business. Can I claim a loss based on my initial investment since I do not draw a salary, or can only my wife claim a loss?. Does it matter since we are married and file joint return? How should I set up our initial basis? Majority from my wife in order to maximize our ability to claim losses if I can not claim based on having no salary? any advice would be helpful as i continue to investigate. Bill