Discussion:1040 and Shareholder Basis
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Discussion Forum Index --> Basic Tax Questions --> 1040 and Shareholder Basis
Discussion Forum Index --> Tax Questions --> 1040 and Shareholder Basis
Sjpaccounting (talk|edits) said: | 21 March 2008 |
| I need reassurance right now--I guess the only response I need is if I am correct or not.
I am completing a 2006 1040. My client has a s-corp. Takes more distributions then he should, therefore his basis is zero and has suspended losses. I definitely have to use the ordinary income on his k-1, but because of his distributions exceeding his basis and the income on his k-1, the 179 expense reported on his k-1 will not be able to be deducted on his tax return for 2006 and will be suspended with his other losses until he has basis that again. am I correct? | |
Sjpaccounting (talk|edits) said: | 22 March 2008 |
| No takers?? | |
| 22 March 2008 | |
| Sounds right, but also if distributions exceed basis your client has capital gain on the amount the distributions exceed his basis. The gain is long term if the client has held the stock in excess on one year. | |
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