Cancellation of debt for an S corporation

[SusanA1]

I have an S Corporation that received a 1099-C for about $500k.  We can exclude $200k since their liabilities exceed their assets.  How do I reduce the tax attributes of the S corporation? 

They have an ordinary loss of $50k in the same year, they have a carryover of disallowed sec. 179 deduction of about $16k, and shareholder has about $80k in suspended losses that were limited by basis.   

I am pretty sure all of these tax attributes (total $186) would be reduced to zero since we excluded $200k from the 1099-C.    Are they limited at the S corporate level or at the shareholder level?  And how would this be entered into Lacerte.

I would appreciate any guidance.

Thank you.

[sjrcpa]

Are there fixed assets?

Are you talking 2022 COD?

I think the reduction in tax attributes takes place 1/1/2023, assuming your S Corp is calendar year.

[SusanA1]

They only have the $16k in assets at cost.  I was estimating the FMV at $10k.  The 1099-C is from 2021, we are filing an amended 2021 return.  They are calendar year.