Unlocking Tax Savings Allocating Passthru Items to S-Corp Shareholders

Loss or deduction pass-through items​​ If a shareholder is allocated an item of S corporation loss or deduction, the shareholder must first have adequate stock ... This is particularly useful when there may be suspended loss carryovers due to at-risk limitations. In summary, the shareholder or shareholders ... This liquidation is technically a taxable transaction to both the S corporation and its shareholders, but in many cases, in keeping with the ... Both S corps and LLCs are known as pass-through entities because they pay no corporate taxes. Instead, they pay their shareholders, who become responsible for ... Although a detailed review of these situations is beyond the scope of this article, they include utilization of an employee stock ownership plan ... Step 2: Target S Corp shareholders contribute the stock of the Target S Corp to Newco in exchange for equity of Newco (at this point, the Target ... Pass-through reporting: S corps are pass-through entities so profits/losses pass to shareholders. For shareholder's tax return: Details the data ... S corporations offer a valuable perk: the flexibility to allocate income and losses among their owners as needed. In practical terms, one owner can receive a ... Once the stock basis of the shareholder has been reduced to zero, pass-through losses and deductions can still be deducted to the extent the ... ... S Corporations flows through to the individual shareholders ... single taxable year, whether made directly or by a pass-through entity and allocated to such ...