How can shareholder deduct a liability he had to pay for a closed corporation

[WhiteOleander]

Client had a retail feed store corporation that he had to close. It had no assets. He didn't receive any funds or assets when he closed it. The Corp. Owed the state of Texas about 250,000 in unpaid sales tax liability. The shareholder had to pay that out of his personal funds. He would like to deduct it on his personal return. I'm not sure where it could be deduct. It wasn't a Scorp. And it technically was not his debt. Any help would be appreciated. Thanks

[TaxGuyBill]

He essentially made a Capital Contribution to the corporation, which increased his Basis in the corporate stock. So that is how it is treated.

[WhiteOleander]

Thank you very much. Appreciate it

[BOB W]

Sales tax is always a fiduciary responsibility placed on the responsible person for NOT paying when due.