S-Corp Loss Carryforward - Departing Shareholder

[Kevin1]

S-Corp had a loss that exceeds shareholder basis, so that shareholder has a loss carry forward on Form 6198.   The shareholder has decided to walk away from the company.

Is the deductibility of the loss completely gone for the shareholder?   What other implications are there?

[itonewbie · Accepted solution]

What do you mean "walk away from the company"?  This is an s-corp.  The taxpayer still has shares held in that s-corp. If the taxpayer establishes stock or debt basis in future years, those suspended losses may still be allowed.  If the taxpayer disposes of the shares, those suspended losses will be gone.