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RC Section 1367(a)(2)(B) allows S Corporation pass-through losses to reduce the S Corporation basis if allowed or allowable, regardless of the S Corporation shareholders claiming
RC Section 1367(a)(2)(B) allows S Corporation pass-through losses to reduce the S Corporation basis if allowed or allowable, regardless of the S Corporation shareholders claiming the losses on their income tax return. However, the excess losses and deductions are limited to the S Corporation shareholder's adjusted basis in stock plus any adjusted basis in any corporate indebtedness to the shareholder.
- Tax planning is an essential part of CPA firms and valuable services to clients.
- Suggest a plan for a client to maximize the deductible pass-through losses and deductions over the initial investment from a new wholly owned S Corporation.
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