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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 586
Experience:  10 years experience
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I have a client that owns a c corporation which generated a

Customer Question

I have a client that owns a c corporation which generated a loss on the first year of business. I know that c corporations do not pass through any loss/income to their owners. However, i want to know of loopholes to somehow report that loss in the clients personal return? Whether it be reporting it in a different way or what not.
Submitted: 2 years ago.
Category: Tax
Expert:  Lev replied 2 years ago.
Hi and welcome to our site!Unfortunately - there is NO way to pass C-corporation losses to the shareholder's personal tax return...If first year losses are expected - I assume that C-corporation doesn't pay wages to shareholder - correct? That would reduce personal income and reduce losses.In such situation - C-corporation is not correct choice from tax prospective.
Customer: replied 2 years ago.
I am not satisfied with the answer.
Expert:  Lev replied 2 years ago.
That is perfectly fine and understandable.The tax law related to taxation of C-corporations and shareholders is design such a way - these are different taxing entities...The shareholder recognizes taxable income or loss on dividends and/or other distributions from C-corporation and when shares are sold or otherwise disposed.If you are looking to pass losses from the corporation to the shareholder - we need to use a different type of entity.