Discussion:S-corp Losses in Excess of Basis
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Discussion Forum Index --> Tax Questions --> S-corp Losses in Excess of Basis
| 3 April 2008 | |
| I have a new client that is an s-corp. I'm reviewing their prior personal and corporate returns. In 2006 they deducted losses in excess of their basis in the s-corp. Should they amend the prior year return? That will not go over well. Has anyone else run into this problem? What do you suggest to your clients?
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| 3 April 2008 | |
| I'm not sure what to do with this problem. Can anyone help? | |
| 3 April 2008 | |
| Cindy,
Search to the left, but here's something for you: Tom | |
| April 3, 2008 | |
| Yeah, just amended a bunch, but got lucky due to low income anyway those years, and the suspended losses rolled into the year of sale. You don't have to amend, but you have to tell them that they should. | |
| 3 April 2008 | |
| I know that a personal guarantee of a loan made to an s-corp is not supposed to give the shareholder loan basis. Is there a difference if it is an unconditional guaranty? I have a husband and wife dentists that borrowed over 400K in the name of the s-corp. They really need the loan basis to offset these start-up losses. I think the inital loan should have been made to them directly, but I believe it went through the corp since all of the equipment would be pledged as collateral. Is there any way to stucture this so they can benefit? It would seem to me that there may be special rules or cases that relate to PSC. Am I dreaming or is there a way to help them? | |
| April 3, 2008 | |
| PSC doesn't apply to S. Many many court cases have consistently ruled that it must be their debt to count. Not the corps'. | |
RoyDaleOne (talk|edits) said: | 3 April 2008 |
| In my way of thinking;
1. In 2008, redo loans to personal name(s), (Note the S Corp can guarantee the loans and pledge the equipment as collateral.) 2. Suspended losses are freed up and may create an NOL 2008, or reduce income taxes in 2008. | |
| 3 April 2008 | |
| Roy,
I was thinking that is what they need to do for 2008. Is it just me...isn't this stupid? They can put the loans in their name and then turn around and make the loan to the corporation. We end up in basically the same place. | |
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