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PDtax
PDtax, CPA firm owner
Category: Capital Gains and Losses
Satisfied Customers: 4093
Experience:  Tax professional and business consultant for 34 years
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S corp has the following profit and losses years

Customer Question

S corp has the following profit and losses for fiscal years 2008 ,2009,2010,2011,2012
2008.......7845 loss
2009.......12500 loss
2010 ......59600 loss
2011....21420 loss
2012........112500 profit
2013........57950 profit
2014........12230 profit
The basis of the shareholder is $290,000.
The shareholder paid tax on the $112500 profit of 2012 without deducting any prior years losses. That means, losses 2008,2009,2010,2011 were not deducted from 2012 profit.
So, when the s cop was sold in 2015, can the share holder claim losses which it didn't deduct in 2012?
Submitted: 7 months ago.
Category: Capital Gains and Losses
Expert:  PDtax replied 7 months ago.
Hi from just answer. I'mCustomer I'll assist.
Expert:  PDtax replied 7 months ago.
The losses are deductible against other income of the shareholder in the year incurred. They aren't deducted against s corp profit.The losses from prior years might be deductible, depending on basis or at risk limitations in prior years. An example:Shareholder puts in $500 for 20% s corp ownership. Year 1 loss is $18,000. The shareholder can claim $500 in losses, the remaining $17,500 is carried forward against future income.The 2012 return might still be open for amendment in your case. I would start there to see if you have a prior year basis limit, which would allow extra life to those losses. If not, those losses are lost.Thanks for asking at just answer. Positive feedback is appreciated. I'mCustomer

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