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Reporting S-corporation Shareholder Basis when corp is dissolved
I have an S-corporation that is filing a final tax return for 2021. There were two shareholders, each owning 50% of the corporation. Shareholder A contributed a large amount to the Corporation in 2021 to pay off the Corporate debt and Shareholder B made no capital contributions . At dissolution, how do you write off the remaining Shareholder A basis, which is not offset by the shareholders 50% share in business losses? Is the end of the year basis after the offset of the current year business loss, treated as a capital loss on Schedule D?
