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Need Some Deductions for 2011?
Don't overlook these!
Updated for 2011
Business Structures
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Deducting S-corporation Losses
Assuming you actively participate in the operation of your S-corporation and you're not merely a passive investor, if your S-Corporation suffers a loss in any tax year you can deduct your share of the loss against your other outside sources of income.
Example:
- You own a 50% interest in your S-corporation.
- Your new S-corporation suffered a loss of $10,000 it first year.
- Your share of the loss is $5,000 (50% x $10,000.
- You have a part-time job from which you earned $20,000.
- You also earned $1,000 in interest and received a stock dividend of $300.
- Your total income from your job, interest, and dividend is $21,300.
You can deduct the $5,000 loss from your $21,300, reducing it to $16,300.
CAUTION! You can only deduct an S-corporation loss up to what is called, your tax basis.
What makes up your tax basis is discussed next, under At-Risk Rules.
Next:
S-corporations: What Are At-Risk Rules? Passive Activity Rules
Related Links
- Deducting Health Insurance Premiums
- Deducting S-corporation Losses
- Your S-corporation Tax Basis
- Your S-corporation Stock Basis
- Adjusting Your S-corporation Stock Basis
- Why Annual S-corporation Stock Basis Adjustments Are Made
- Your Loan Basis
- Borrowed Funds Used in the Business
- Adjusting Your Loan Basis
- Your S-corporation Loan Basis
- Borrowed Funds Used in Your S-corporation
- Reducing Your S-corporation Tax Basis In the Correct Order
- Restoring Your S-corporation Tax Basis In the Correct Order
- S-corporation Health Insurance Premium Deduction
- Sole Proprietorship
- Partnership
- C-corporation
- Limited Liability Company (LLC)
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