Sunday, October 7, 2018

S Corporation Basis

If you are a shareholder in an S corp, you have to have basis in order to deduct losses. One way to make sure you have enough basis is to lend money directly to the S corp before year end. Guaranteeing a corporate loan or having the S corp get a bank loan does not give the shareholder basis. You cannot reduce your basis below 0 so any losses that you cannot deduct are suspended.

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