Hello RobertB4444
Thank you for your clarification. Based on your response, it seems I reported my loss incorrectly on my 1120S. I now understand I have a loss of investment instead of a sale of business.
To clarify some of my concerns to properly amend this, I want to confirm the following:
Since the loss of my investment in the business should be treated as a capital loss, I should report it as a sale of an investment on Form 8949 which should flow to Schedule D, rather than on Form 4797( which for sale of business that i initially reported).
On which tax form should I report the loss of my investment? Should it be included in the 1120S tax return, or should I report it on my 1040 personal tax return? in another word
Are you saying that I should not have reported the loss of my investment on the 1120S at all and instead should have entered it in my 1040 personal tax return?
