Basis in s corporation stock and nothing received at liqudation just closed

[sdtaxman]

I have a client that was a shareholder in an s-corp and still has basis in the stock. The s-corporation just closed the door a year ago and this year they received a final k-1 with no income and showing a loss on equipment that was junked out for no money. Can they write off the remaining basis in the stock as a loss? I think they should be able to because there is nothing for them to get and they have the investment but I have never had this situation before. Thanks for your help.

[Maribeth]

Yes, they have a capital loss to the extent that they still have basis after accounting for the final K-1.

[JON]

If 1244

stock write off of remaining basis would be ordinary. If he was in it from day one and there were no other changes to stock ownership, if liquidated properly in most cases loss would have already been taken, both deductible and not deductable. That is not always the case, but should/could be...