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Old 09-22-2017, 01:01 PM
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Join Date: Sep 2017
Location: Orland Park, IL
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Shareholder Basis Write off?

I'm trying to find information about how (or if we can) write off a shareholders basis when they close their S-Corp.

I know we can take a Sec 1244 loss for the stock cost but my client has an additional $274k in basis that I am trying to find a way to get that write off.

All assets were "repossessed" and I did all those adjustments and gains/losses on those, there was no cash in the S-Corp to distribute to him after all debts were paid so this is his remaining basis.

It seems "to good to be true" that we could take this loss, but then I try to look at it as he paid tax on all this money throughout the years but never got any of the cash? Would it just be a LTCL?



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Old 09-23-2017, 03:24 AM
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Calculating the S corporation shareholder?s basis correctly is important because it measures the amount the shareholder can withdraw or receive from the S corporation without realizing income or gain. You get to claim a loss on your Sch D for the remaining basis as LTCL



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