BASIS LIMITATION LOSSES S CORP final return

[mike9]

When an S corp sells its business at a loss, are the losses which includes mostly  1231 losses, and some carryover from prior year losses not taken due to basis limitations , is the shareholder able to take all the losses on the K-1  or do they lose it forever like an NOL for a C Corp

l Business was run basically form Loans from relatives  which is not part of the basis. 

Any help will be appreciated

Thx

Mike

[Accountant-Man]

Were the assets sold, or was the stock of the company sold?

[mike9]

Asset Sale

[sjrcpa]

Any losses not allowed by basis limit are not allowed. No special dispensation in the final year.

[mike9]

Thank you...so they are like a C Corp unused NOL?

Are you permitted to carry forward  Capital Gain Losses  on the perssonal return?

[sjrcpa · Accepted solution]

"so they are like a C Corp unused NOL?"  Yes 

Capital losses are allowed on the personal return if there is basis for them, and subject to the $3,000 net loss limit.

[mike9]

Pro Series is allowing the Capital Losses ( not previousd carryover) eventhough Form 7203 shows otherwise 

[rbynaker]

ProSeries does not have a mechanism for tracking basis limitations.  You have to do it manually and make adjustments to the data entry.

With the 7203 being part of the software now you'd think they have 90% of what they need to do this, it just hasn't been programmed.

[mike9]

Thanks all of you for taking the time to help me in this crazy time.

You are all awesome!!

Cheers

Mike