topic Sub S adjustment to multiple assets due to insolvency in Business & farm

Sub S adjustment to multiple assets due to insolvency

annmci — Tue, 17 Feb 2026 15:17:52 GMT

I admit I posted this elsewhere but there was a mistake so this is much clearer.

I loaned some $ to someone whose return I am preparing (a friend so not being paid).

They are never going to be able to pay me back and they are insolvent but they do have enough basis between 2 or 3 assets for basis to be reversed to $0.

They are being depreciated as last quarter straight line. I consider the cancelation to have occurred the end of the 2nd quarter of 25.

I'm not seeing how this can be done in TT. I do know how in QB. I suppose worst case I can consider it to be the end of the year and then in 26 just delete the asset and reinput with $0 basis.

Any help would be greatly appreciated.

Re: Sub S adjustment to multiple assets due to insolvency

annmci — Wed, 18 Feb 2026 17:04:32 GMT

Anybody? I hope I don't have to override. Am I right that, if I do, I will likely have to paper file?

Re: Sub S adjustment to multiple assets due to insolvency

Mike9241 — Wed, 18 Feb 2026 21:16:56 GMT

Did you loan the money to the individual or directly to the S-corp? If it were to the individual who then lent the money to the S-corp, I believe it should be the individual and the S-corp filing the form. The S-corp because the individual is discharging the corp from repaying him, and the individual because you are discharging him from repayment.

of course, I'm making assumptions because I'm not sure that I have all the facts. Complications would arise if the individual used the debt for basis in deducting S-Corp losses. that u