Thank you @AliciaP1. This clarifies a lot.
Now, please confirm this for Form 7203:
- Line 1 Stock basis at the beginning of the corporation’s tax year: 0 (assuming 2020 similar to 2021)
- Line 2 Basis from any capital contributions made ... during the tax year: 4,000 (2021 loss)
- ...
- Line 11 Allowable loss and deduction items. Enter the amount from line 47, column (c): 4,000 ??
Unfortunately, I don’t understand the instructions for Line 47 column(c) “enter the pro-rata amount on the corresponding line in column (c)” (https://www.irs.gov/pub/irs-pdf/i7203.pdf)
Please confirm these assumptions for Line 47:
- column (a) Current year losses and deductions: 4,000
- column (b) Carryover amounts from the previous year: 0 (assuming 2020 was similar to 2021)
- column (c) Allowable loss from stock basis: 4,000 (is this the pro-rata amount?)
- column (d) Allowable loss from debt basis: 0
- column (e) Carryover amounts: 0
Best regards,
Gene Miller
