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Business & farm
@Opus 17 B. An S-corp (formally or taxed as) prevents you from deducting operating losses against your other income. For example, if you bought a fancy new car and took depreciation rather than standard mileage, your expenses might give you a tax loss that you could deduct against other income, even though you have positive cash flow. You can't do that as an S-corp
to take an S-Corp loss you need tax basis and material participation. then the loss goes against other income. just tried an example with Turbotax desktop. single, standard deduction, material participation, $50,000 salary from S Corp and $20,000 S Corp loss. result AGI $30,000, taxable income $17,450
‎August 17, 2022
4:43 PM