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PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4093
Experience:  35 years tax experience, including four years at a Big 4 firm.
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I have a cimoany that has ben in existence years but has no

Customer Question

I have a cimoany that has ben in existence for 40 years but has no been profitable or several years. It now has 57000 in corporate losses plus 21000 short term and 51000 in long term stock sale losses. What can I do to recover something?
Submitted: 1 year ago.
Category: Tax
Expert:  PDtax replied 1 year ago.

Hi from just answer. I'm PDtax, and can assist.

C corporations with loss carryovers have a few options to get some value from the losses. The first is add some income generating activity.

Expert:  PDtax replied 1 year ago.

I know that seems simple enough, but from the owner's perspective, there are more options than just adding income. You could buy a profitable company and merge it into yours, using your losses (subject to limits) to save tax dollars.

Expert:  PDtax replied 1 year ago.

You could sell your corporation, for another company to use the losses, again subject to limitations.

Expert:  PDtax replied 1 year ago.

Another option might be too take a look at how the company afforded ask those losses. If you had to or want to lend the company money, I can think of a pretty good tax technique.

If you loan your company money, and the company can't pay, under certain circumstances, there company would have a taxable gain of you wrote off the loan. There would be no corporate tax due. You could set it up so that you get a tax writeoff for the loan you can't collect.

Expert:  PDtax replied 1 year ago.

This lady suggestion requires adherence to some strict guidelines for business bad debts, so working with your tax pro will be important, but those losses could save you some real $$.

Expert:  PDtax replied 1 year ago.

Thanks for asking at just answer. Positive feedback is appreciated. I'm PDtax.