I have a Sub-S Corp (XYZ Inc) that has an operating loss of $75,000 for TY 2018 (return is on extension). Per THETAXBOOK tab 19-9 there is a note on the TCJA that there is a limitation on losses for tax years 2018 -2025, excess business losses of a taxpayer other than a C Corp must be carried forward. An excess business is the amount by which the total deductions from the taxpayers trade or business exceed the taxpayer's gross income or gains from such trade or business , plus a threshold amount.
In the case of an S corp, the provision applies at the shareholder level (in this case Taxpayer & Spouse). Each shareholder's pro rata share of items of income, gain or loss are taken into account in applying the limitation for the taxable year. This limitation applies after the application of the at-risk and passive loss rules. This is all from Tab 19-9 - of course. Losses of Sub-S is not carried back.
On the personal side: the TP and Spouse have salaries from the Sub-S of $70,000 and the Sub S Losses of $75,000. It looks like the plan is to carry forward $5,000 to 2019. Their form 1040 for 2018 is very simple. The salaries & S loss are pretty much the whole thing. I (jonnytpp7) put this all into ProSeries for 2018 & the system shows the $5K carrying FWD to 2019.
So just want want some reassurance that my thinking on this is right. Oh what is this "plus a threshold amount" thing? Any clarification on that w/b appreciated also..
Thanks... (by the way - this is my 1st post to the message board )
In the case of an S corp, the provision applies at the shareholder level (in this case Taxpayer & Spouse). Each shareholder's pro rata share of items of income, gain or loss are taken into account in applying the limitation for the taxable year. This limitation applies after the application of the at-risk and passive loss rules. This is all from Tab 19-9 - of course. Losses of Sub-S is not carried back.
On the personal side: the TP and Spouse have salaries from the Sub-S of $70,000 and the Sub S Losses of $75,000. It looks like the plan is to carry forward $5,000 to 2019. Their form 1040 for 2018 is very simple. The salaries & S loss are pretty much the whole thing. I (jonnytpp7) put this all into ProSeries for 2018 & the system shows the $5K carrying FWD to 2019.
So just want want some reassurance that my thinking on this is right. Oh what is this "plus a threshold amount" thing? Any clarification on that w/b appreciated also..
Thanks... (by the way - this is my 1st post to the message board )
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