Get your taxes done using TurboTax

you are correct. where does the money come from to fund these losses?  basis not only includes cash put in for the stock but also loans made directly by the stockholder(s) to the S-Corp. handling loans by stockholders can get very complicated especially if they repay part of the loan.

 

 

 

if you don't have tax basis you must check "some of investment in the corporation is not at-risk" box and complete form 6198.