Thank you, @Rick19744
In regards to two of your comments:
1. "As the debt is paid off, on form 8949, the shareholder will show a cost basis of the principal amount paid and no sales proceeds. This will be LT and you can describe it as "S corp debt payment" or something along those lines. This will just be included in any other capital gain / loss transactions the shareholder has in their personal tax return."
There is no way, this can be classified as ordinary loss? The debt is close to 300k. With the capital loss, we only would be able to deduct 3,000 per year.
2. "In item 2, this is the point that the S corporation shareholder satisfies the economic outlay requirement. This essentially is an increase in capital for the principal and since no "proceeds" are received for the stock, generates the capital loss."
To clarify this. You are saying that after the debt is paid off, we also can claim a capital loss for the stock on 8949?
Thank you so much!
