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Stephen G.
Stephen G., Financial Advisor
Category: Capital Gains and Losses
Satisfied Customers: 6181
Experience:  Senior Tax Expert; CPA/PFS(retired)Personal Financial Planner; Small Business & Professional Mergers & Acquisitions
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CAN CAPITAL LOSSES IN EXCESS OF CAPITAL GAINS ON THE NON "S"

Customer Question

CAN CAPITAL LOSSES IN EXCESS OF CAPITAL GAINS ON THE NON "S" PORTION OF A QUALIFYING ESBT TRUST BE DEDUCTIBLE TO REDUCE THE TAXABLE INCOME OF THE TRUST?
Submitted: 8 months ago.
Category: Capital Gains and Losses
Expert:  Stephen G. replied 8 months ago.
The program is correct. Here's a summary of the cite:The regular subchapter J rules apply in determining the extent to which any loss, deduction, or credit may be taken into account in determining the taxable income of the S portion.The S Portion will be taxed at the highest individual rate on all ordinary income.14 Further, the S Portion will also be taxed on any gain or loss on the S corporation stock if the trust disposes of the stock.15 Capital gains will be taxed at individual rates. However, no deduction is allowed for capital losses that exceed capital gain. Similar to the loss limitations for individual shareholders, any operating losses may be limited by the S portion‟s basis in S corporation stock, the at-risk rules and the passive loss rules. If operating losses are not limited, the NOL may be carried to other years and deducted against other income of the S Portion.16
Expert:  Stephen G. replied 8 months ago.
Just Checking in....................Do you have any follow-up questions?If not, please remember to rate my response as that is the only way we receive credit for our work.Steve G.

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