s corp basis and loss

You really need to seek the advise of a Tax Professional. Not all accountants are Tax Professional. S Corporations have special rules & they are pass through entities. Regardless how your personal tax software is handling things when you input the info from the K-1.

Did you prepare the 1120S return & issue the K-1's or did someone do that for you? Did you do your 1040 return sheet & tie the numbers you may not be doing it correctly.

If you are not getting Professional advise - their is no one fits all here - its case by case depending on your taxes - Invest sometime & Go to IRS web site & read the actual instructions to the form you are doing to recognize what your tax situation is to know what is allowed or not versus what your tax software is doing. After all your tax software does what you input or tell it to do & it does not give you the professional advise. www.IRS.Gov

Good Luck

Lordis Gawzner, EA

A2T Consulting, Inc.

Lordis@A2TConsulting.com

You will definitely want to check out the IRS website regarding net operating losses (NOL’s). Typically a shareholder’s deductible share of losses and deductions is limited to the total of their adjusted basis in corporate stock plus any debt the corporation may owe him. Disallowed deductions and losses may be carried forward to a year in which the stockholder has restored their basis in the stock or debt. Be sure to check out Pub. 536 and Form 1045 on the IRS website for additional information. I hope this helps.

You may not choose the amount of loss you get to deduct in a given year. If you have $30k of basis, and more than $30k of losses, you're stuck taking the $30k of losses, even if it means your itemized deductions and personal exemptions go to waste. (My best guess is that you have no NOL based on the facts you've described - standard deduction plus two exemptions for a married couple is more than the $15k you want to avoid deducting.)

I suspect the reason you're having a hard time explaining to your accountant what you want to do is that what you're proposing is completely unallowable.

You really do need to be using a competent preparer for both the S-corp return and your personal return. There are a lot of possible elections that can be made at the S-corp level that might reduce your loss for the current year (although going from $100k to $15k would be a stretch). A good professional working on both returns simultaneously can optimize the results (as much as your given fact pattern allows).