When can I take a loss on an S Corp?

[joe7230]

What line on the 1120S should I look at to determine if a loss is deductible?

Is it on Schedule M-2?  Also is an asset purchase considered a capital contribution

to calculate Schedule M-2.  How about an asset fully depreciated in the same year

as purchase?  

[PhoebeRoberts · Accepted solution]

1) The basis schedule maintained by the shareholder.

2) No, M-2 does not calculate shareholder basis, other than occasionally coincidentally.

3) No, asset purchases are not shareholder contributions to capital.

4) No, depreciation is not relevant to determining shareholder contributions to capital.

[abctax55]

5) Not to be rude, but you are in over your head.  Get professional assistance (if you are a DIYer) or find a mentor (if you are a tax preparer).

[IRonMaN]

Yeah, I was kinda thinking the same thing but I didn't want to appear rude.  Sometimes folks need to stick at what they do well and refer other work elsewhere.  There are certain things that I don't touch and I have no problem telling folks that they need to find someone in those cases.  Nobody can be an expert on everything ------------------- well maybe nobody except Phoebe :wink: