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BASIS LIMITATION LOSSES S CORP final return

Forum|Forum|2 years ago
March 23, 2024
2 replies
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When an S corp sells its business at a loss, are the losses which includes mostly 1231 losses, and some carryover from prior year losses not taken due to basis limitations , is the shareholder able to take all the losses on the K-1 or do they lose it forever like an NOL for a C Corp

l Business was run basically form Loans from relatives which is not part of the basis.

Any help will be appreciated

Thx

Mike

ProSeries Professional

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Best answer by sjrcpa

"so they are like a C Corp unused NOL?" Yes

Capital losses are allowed on the personal return if there is basis for them, and subject to the $3,000 net loss limit.

Level 13

Were the assets sold, or was the stock of the company sold?

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mike9Author

Level 5

Asset Sale

Level 15

Any losses not allowed by basis limit are not allowed. No special dispensation in the final year.

The more I know the more I don’t know.

mike9Author

Level 5

Thank you...so they are like a C Corp unused NOL?

Are you permitted to carry forward Capital Gain Losses on the perssonal return?

sjrcpaAnswer

Level 15

"so they are like a C Corp unused NOL?" Yes

Capital losses are allowed on the personal return if there is basis for them, and subject to the $3,000 net loss limit.

The more I know the more I don’t know.