One of my clients, heretofore very profitable, was involved (innocently I think) in a scandal that broke in January. As a result of being named as a participant on nationwide TV coverage and internet articles, their customers will no longer buy from them, and customers with large receivable balances are refusing to pay.
Bottom line is they will have a whopping loss - so big that the loss even significantly eclipses their retained earnings.
My question - How to realize tax savings from this horrendous loss. Their LLC has filed as a C Corp, and will shut down at the end ot this fiscal year. That means there is no way for the corporation to ever deduct the loss.
My thinking is that upon liquidation, the owners should somehow create basis for themselves but ONLY if they make more contributions. If the C corp never has their losses indemnified, I don't think any tax benefit will ever arise from their loss.
Any ideas??
Bottom line is they will have a whopping loss - so big that the loss even significantly eclipses their retained earnings.
My question - How to realize tax savings from this horrendous loss. Their LLC has filed as a C Corp, and will shut down at the end ot this fiscal year. That means there is no way for the corporation to ever deduct the loss.
My thinking is that upon liquidation, the owners should somehow create basis for themselves but ONLY if they make more contributions. If the C corp never has their losses indemnified, I don't think any tax benefit will ever arise from their loss.
Any ideas??
Comment