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Question

What losses and deductions are included in the basis limitation of the shareholder's share of the S Corporation losses and deductions?

Answer

The losses and deductions are stated in IRC Sections 1366(a)(1)(A) and 1366(a)(1)(B). The shareholder's distributive share of these losses appears on the shareholders Form 1120S, Schedule K-1. All items listed, including charitable contributions and foreign taxes, are used in calculating the limitation of losses.

Related topic: Partner’s and Shareholder’s Basis Worksheets FAQs (1040)

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