How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask MequonCPA Your Own Question
MequonCPA
MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2342
Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
5142404
Type Your Tax Question Here...
MequonCPA is online now
A new question is answered every 9 seconds

I am trying to fill out my S-Corp K-1. I have being in business

Customer Question

I am trying to fill out my S-Corp K-1. I have being in business for three years, the first year an accountant did my taxes. I have never made a profit so this year I filled the 2009 and 2010 together, but I don't know if in each year K-1 I only include the losses for that year or if each year losses should be added.

-3 shareholders. Total initial investment of $15000. (51%, 24.5%, 24.5%)
-2008 Ordinary Business Loss -17,863, K-1 line 1 is -5,954, line 16 is C 3
-2009 Ordinary Business Loss -7,643, don't know what to do on K-1.
-2010 Ordinary Business Loss -1,273, don't know what to do on K-1.
Submitted: 5 years ago.
Category: Tax
Expert:  MequonCPA replied 5 years ago.

Hi and welcome to JustAnswer:

 

The loss for each year is determined separately. The information you are providing for 2008 doesn't correspond to the percentage interests listed. There is probably additional information on Schedule M-1.

 

Also, while each shareholder is provided with their allocated loss, the deductible amount is limited due to the at risk rules.

 

Without additional funds loaned by a given shareholder the loss is suspended until there is basis or income. See Form 6198 and instructions, links below.

 

http://www.irs.gov/pub/irs-pdf/f6198.pdf

 

http://www.irs.gov/pub/irs-pdf/i6198.pdf