Your investment in the stock of the S-Corp is either at-risk or guaranteed.
Per the IRS:
At-Risk Amounts
You’re at risk in any activity for:
- The money and adjusted basis of property you contribute to the activity, and
- Amounts you borrow for use in the activity if:
- You’re personally liable for repayment, or
- You pledge property (other than property used in the activity) as security for the loan
Most investments are at-risk because there is no guarantee they will get their investment back. So, your basis limitation loss is an at-risk loss carryover. Follow the steps I outlined to report your loss carryover and apply it to 2022.
@erinpatrickhourani
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