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How to Elect a 1244 Loss on Both C-Corp and 10404

tccpg289
Level 4

Taxpayer has a C-Corp that incurred substantial losses and they are shutting it down.

The return has been completed, however I cannot find where to make this election to ensure the individual owner is able to take losses on the Sch. D.

Where is this section on both the C-Corp and the individual return?

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4 Comments 4
sjrcpa
Level 15

Nowhere on the 1120.

The more I know, the more I don't know.
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tccpg289
Level 4

Thanks, is there an election on the 1040 as well?

Let's say there were $10k in losses at the C-Corp, is it as simple as taking the $10k as the cost/basis and $0 as the sale price on Sch. D in ProSeries?

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sjrcpa
Level 15

The 1244 loss is the shareholder's basis in the corporate stock. Which has nothing to with the corporation's loss.

The more I know, the more I don't know.
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tccpg289
Level 4

So what happens to all of those corporate losses when the company closes?

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