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How to file s-corporation loss on personal tax?
Posted by admin on Sep 15th, 2008
Gator125 asked:
I started a S Corporation in 2006 and put in $900 to start the business. At the end of year my corporation showed a loss of $300. My questions are….
I started a S Corporation in 2006 and put in $900 to start the business. At the end of year my corporation showed a loss of $300. My questions are….
1. I will be filing a loss on my s corporation return (s-1120) of $300, which is fine. But can I show $900 as a loss on my personal return?
2. Do I need to combine both my s-corporation and personal returns or can I file them separately?
3. Do I need to use some special form to transfer my loss of $900 from s corporation to personal return?
Any input I can get on this would be greatly appreciated.
Thanks!
S-corp and personal must be filed separately. You already did the s-1120. That information can be “transferred” to the schedule E on the personal return.
An eligible domestic corporation can avoid double taxation (once to the shareholders and again to the corporation) by electing to be treated as an S corporation. Generally, an S corporation is exempt from federal income tax other than tax on certain capital gains and passive income. On their tax returns, the S corporation’s shareholders include their share of the corporation’s separately stated items of income, deduction, loss, and credit, and their share of non separately stated income or loss.
If you are an S corporation use the information in the charts below to help you determine some of the forms that you may be required to file.
1) The $300 loss will flow through from the K1 to your Schedue E. The $900 you invested is not deductible. It is your beginning basis for stock in the S-Corp.
2) They are separate entities and must be filed separately.
3) See 1) above.
Your S corp should have filed a Form 1065 with K1. (sent to IRS) You would also receive a K1 from the corporation. The gain or loss on the K1 is what you would show on your tax return on Schedule E page 2. That information will transfer to your 1040 page 1 on line 17.
This is if you are the only stock holder of the corporation. If there are other owners, then each owner would get a K1 showing their share of the profit or loss depending on what % of the corporation they own. If you are the only owner, the 100% of the profit or loss comes to you and is reported to IRS on forms mentioned.
Please note,, you can file an extension for a personal tax return, but not for the corporate return. So if you haven’t filed the 1065 and K1 with IRS, do it soon.
so ,, if that does not answer your questions,, here are the direct answers to what you asked..
1. no, you only claim the profit or loss from your corporation, no more ,, no less.
2. yes and no.
File separate returns, , but the profit or loss from S corp goes on personal return.
3.Yes, but you didn’t have a $900. loss,, you state you had a $300. loss. Use schedule E