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I am the sole shareholder in a C Corp that has carry forward…

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I am the sole...

I am the sole shareholder in a C Corp that has carry forward losses. my last corp tax filing was thru june 30, 2017 although operations ceased Dec 31, 2016. can these losses be applied to my personal tax return? past responses say only as it pertains to capital gains. past responses on line also say that a C corp carryforward can only be assumed by a merger with another C corp. is that still the case?

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Submitted: 5 months ago.Category: Tax
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12/21/2017
Tax Professional: Carter McBride, Certified Public Accountant (CPA) replied 5 months ago
Carter McBride
Carter McBride, Certified Public Accountant (CPA)
Category: Tax
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Hey! I'm Carter, I'm a CPA and can help you out with this.

Unfortunately, no you cannot apply C corporation net operating losses to your personal return, even if the C Corporation has closed down.

It is true, the only way that you can still use these C Corporation losses is if you merge the C Corporation with another C Corporation. This is usually done if another company wants to buy your company. There may be restrictions though on their ability to use all of the Net Operating Losses.

The capital gains issue probably has to do with the stock. if you own the stock, it could now be worthless, so you may have a capital loss on the stock.

Hope that helps. Let me know if you have any other questions. If not, please leave a rating. Thanks!

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Customer reply replied 5 months ago
i will not have any capital gains this personal tax year but expect to in the future. is there a expiration period for personal use of corporate carry forward losses relative to personal capital gains? do i need to keep the c corp alive to the point of filing corp tax returns or just maintaining it as a registered corp at the state level?
Tax Professional: Carter McBride, Certified Public Accountant (CPA) replied 5 months ago

C Corporations require a return as long as it is registered at the state level. The carry forward on capital losses is indefinite. In order to take the capital loss on the stock, the corporation needs to be totally closed down to make the stock worthless. The IRS has a quick explanation of that here: https://www.irs.gov/faqs/capital-gains-losses-and-sale-of-home/losses-homes-stocks-other-property/losses-homes-stocks-other-property-1

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