Discussion:At Risk Rules
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| Revision as of 21:11, 30 September 2009 Kevinh5 (Talk | contribs) ← Previous diff |
Revision as of 21:20, 30 September 2009 Ss-cpa (Talk | contribs) (I was just tryin) Next diff → |
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| Is this an examination or are you just trying to figure out the At-Risk form for filing?}} | Is this an examination or are you just trying to figure out the At-Risk form for filing?}} | ||
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| + | {{ForumReplyPost|UserID=Ss-cpa|Date=30 September 2009|Text=I was just trying to get an answer to a question. I understood the rules as you stated, but the IRS representative said otherwise. My issue is that the returns were prepared by the former CPA with the losses limited by the At Risk Rules. I believe this is in error; that the losses should have been allowed, and would have resulted in NOL's for the individual taxpayer (i.e. 100% shareholder). My follow-up question is how do you correct this if the error goes back to years that are beyond the statute of limitations? Is this a change in accounting method where I would use Form 3115? Either way, he is not going to owe any taxes and he would actually be better off with the At Risk Rules (i.e on Form 6198) carrying the losses forward, but I don't think I should leave this as is. Do you agree?}} | ||
Revision as of 21:20, 30 September 2009
Discussion Forum Index --> Advanced Tax Questions --> At Risk Rules
Discussion Forum Index --> Tax Questions --> At Risk Rules
| 30 September 2009 | |
| As I understand, if a 100% shareholder loans his personal monies to his S Corporation, then that will give him basis for deducting losses. I was told by the IRS that under the At Risk Rules, he would not be at risk for these monies. She said that the At Risk Rules do not allow the consideration of the shareholder loans to the corporation. Is that correct? | |
| 30 September 2009 | |
| the three rings you have to jump through in the S corp circus are the Basis, Passive, and At-Risk tests.
He is certainly at risk for the monies he loaned the company because he stands to lose them.
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| 30 September 2009 | |
| I was just trying to get an answer to a question. I understood the rules as you stated, but the IRS representative said otherwise. My issue is that the returns were prepared by the former CPA with the losses limited by the At Risk Rules. I believe this is in error; that the losses should have been allowed, and would have resulted in NOL's for the individual taxpayer (i.e. 100% shareholder). My follow-up question is how do you correct this if the error goes back to years that are beyond the statute of limitations? Is this a change in accounting method where I would use Form 3115? Either way, he is not going to owe any taxes and he would actually be better off with the At Risk Rules (i.e on Form 6198) carrying the losses forward, but I don't think I should leave this as is. Do you agree? | |
