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Discussion Forum Index --> Advanced Tax Questions --> Tax credit for S corp shareholder w/ zero basis
Discussion Forum Index --> Tax Questions --> Tax credit for S corp shareholder w/ zero basis
Eaglecpa (talk|edits) said:
| 24 June 2008
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| I have a shareholder with suspended losses for 2007 due to zero basis. The S corp has a general business credit and my question is does this need to be suspended and carried forward as well since the shareholder has no basis?
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Eaglecpa (talk|edits) said:
| 25 June 2008
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| I'll attempt to answer my own question here: the credit is also a non-deductible expense by the business. Since basis has to be reduced by the n/d expenses first, then I think we cannot take the credit until we have the basis available to reduce it by this expense. Anyone agree/disagree?
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Riley2 (talk|edits) said:
| 25 June 2008
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| The GBC is limited by the at-risk rules. See Section 49. Also see Code Sec. 49(a)(1)(E)(ii) which provides that recourse financing on GBC property is treated as borrowed by the S shareholder.
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