I want to make sure I understand how a projected loss on the sale of a business property will effect my tax return if the loss exceeds my income for the current year. My question is copied below the example.
Simplified Example:
I own an S-Corp (100%) and receive a K-1. My business sells a property at a loss, and a loss of -$100K is passed through and recorded on Form 4797 and line 14 of my 1040 (2017-version of the 1040). Let's say I have $40K in W2 income and $40K in S-Corp income. Therefore my total income (40+40-100) is negative -$20K.
Question: Does that negative -$20K simply carryover onto the next year's tax return, thus reducing next year's income? And will Turbotax remember to apply that loss to my following year's tax return? (I use TT every year.)
I ask because I've read that when you sell stocks at a loss only a $3K/year portion can be used to reduce income until the loss is fully absorbed. Are there any similar restrictions on how these type of losses are carried-over?
