Bart owns 100% of an S corporation that had a net operating loss in the current year. If there is sufficient basis in the stock, he will carry this loss back to reduce taxes in a prior S corporation tax year.

Question

Quizplus · Accepted Answer

S corporations pass their income, deductions, credits, and losses through to their shareholders annually. Shareholders may use these losses to offset other income on their personal tax returns, but losses cannot be carried back to reduce taxes in prior years; they can only be carried forward.

Bart Owns 100% of an S Corporation That Had a Net