2019 1099-C received by S Corp.

Forum|Forum|6 years ago
April 28, 2020
17 replies
67 views

1099-C info: Debt description 2 vessels Business Assets. Debtor personally liable. Event Code 6.

I think this will end up as taxable Other Income on 1040.

Trying to see if can somehow be excluded from income. Or included as income on the 1120S itself rather than on the 1040. (If income on 1120S, have P/Y Carry forward loss to apply)

Note the cancelled amount gets entered on 1120S page 3 Sch B 'Other Info'. Don't see where it flows to K-1 to shareholder. Should it be on K-1? Or just enter amount on 1040?

Note the only exclusion from income that would remotely apply is if it's Qualified Real Business Property debt forgiveness. Doesn't look like charter boats fall under this category.

Any ideas?

Thanks.

ProSeries Professional

This topic has been closed for replies.

Best answer by sjrcpa

Maybe I used wrong terminology. S Corp has Suspended P/Y losses.

Mostly brought about by losses from operations. Mostly bunch of years in which mortgage interest and depreciation exceeded revenues. Except for 2019, S corp income in positive territory last few years and moving forward. Not sure if this addresses your question.

Thank you

Charlie Allnut

S Corp losses pass thru to the shareholders on their K-1s. They may be suspended at the shareholder level due to basis limits or passive loss rules. They are not suspended at the S Corp level.