Managing S Corporation At-Risk Loss Limitations  

Oleh:

Murphy, Elizabeth

Jenis: Article from Bulletin/Magazine
Dalam koleksi: Journal of Accountancy vol. 209 no. 2 (Feb. 2010), page 26.
Topik: CPA; Economic Climate; Clients; IRC; S Corporation; Risks

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ85.28 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

Today’s economic climate may be dealing your clients a loss. It’s bad enough, especially for small business owners, to have to wonder when they might return to profitability. Beyond that, tax recognition of their losses is limited. One of those limitations is that a taxpayer’s loss deductions are limited to amounts “at risk” in a trade or business or income-producing activity under IRC § 465. This article focuses on the at-risk limitations and their application to S corporation shareholders. It explores some options that may help such clients recognize those losses in a way that minimizes their federal taxes. It shows how grouping trade or business activities in which a shareholder actively participates or a QSub election can help where loss recognition by one activity or S corporation is limited but another is not. Understanding such strategies is important not just for CPA tax practitioners but for tax lawyers, consultants, corporate in-house tax executives and government regulators.

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