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Jon Andrews
Jon Andrews, Certified Public Accountant (CPA)
Category: Tax
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Experience:  I deal with all levels of tax planning and controversy - from the ordinary to the complex.
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A C-Corp filed bankruptcy last year. The sole owner/officer

Resolved Question:

A C-Corp filed bankruptcy last year. The sole owner/officer invested quite a bit as loans to the corp. Can they recoup anything on their personal tax return?
Submitted: 7 years ago.
Category: Tax
Expert:  Jon Andrews replied 7 years ago.

Depending on all of the circumstances, this could result in one or more of the following:

1. a non-business bad debt deduction

2. a business bad debt deduction

3. an increase in stock basis leading to a loss from the sale/disposion of the stock.


Number 1 results in a short term capital loss, number 2 results in an ordinary loss, and number 3 results in a capital loss that is either long term or short term depending on when the stock was acquired vs when it became worthless.



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