S-Corp Loss, Basis Exceded

[geekgirldany]

New customer has S-Corp with losses from previous year and from this year. It was closed at the end of 2007. Sole Shareholder basis in stock and appears debt basis is zero. Am I correct that the losess are forfeited now that the S-Corp is closed?

Thank you

[Nashville]

Yes

Yes, the losses are unavailable, but not because the Scorp has closed. They are unavailable because his stock basis was exceeded.

Technically, the above phenomenon means that his losses are actually "suspended" rather than "forfeited."

There may yet be hope. Depends upon how his corporation liquidates, as the existence of withdrawals in excess of basis tells me there are still potential transactions yet to occur.

[geekgirldany]

Thank you for answering. Yes there are several other transactions. Probably getting ahead of myself but wanted to make sure.

Other liqudation transactions: Employee Loans never paid off, Loan To Shareholders (over $100,000), Payroll Liabiliites assumed by shareholder (over $150,000), other equipment liabilities assumed by shareholder (wife). Second corporation opened that took over the equipment (husband). The couple is separated... so I am having quite a learning experience with this return.