Shareholder Information > Shareholder Basis dialog > Suspended Losses tab

Alerts and notices
Leave feedback

Contact information (optional):

Leave this blank:

Please tell us how we can make this information more helpful.


Characters left:

Use this tab to enter shareholder suspended losses. UltraTax CS combines the current-year and suspended loss amounts and determines the allowable amount based on the available stock and loan basis.

To update a shareholder's suspended loss information, open the Shareholder Basis dialog from the Shareholder Information window's Other Info tab, then click the Suspended Losses tab.

Fields & buttons

Mark this checkbox if the shareholder is making an election in accordance with Regulation 1.1367-1(g). UltraTax CS decreases basis by deductible items (for example, ordinary loss and Section 179 expense) before nondeductible, noncapital expenses. If you do not mark this field, UltraTax CS reduces basis by the nondeductible noncapital expenses before reducing the basis by the deductible items. UltraTax CS proformas this field the following year.

UltraTax CS automatically prints the election statement under Regulation 1.1367-1(g) in the shareholder's shareholder package unless you mark the Suppress 1367 election statement field.

Mark this checkbox to suppress printing the election statement under Regulation 1.1367-1(g). The Section 1367 election statement is not an annual election. Once the election is made, the election does not need to be made again. UltraTax CS marks the checkbox when the client is proforma'd to prevent the election statement from printing the following year.

Mark this checkbox to have UltraTax CS share the following amounts from the Shareholder's Basis Worksheet with the 1040 client in UltraTax/1040.

  • Beginning of year stock basis from Page 1 of the Shareholder's Basis Worksheet
  • Beginning of year loan basis from Page 1 of the Shareholder's Basis Worksheet
  • Loan basis restored
  • Suspended losses from Page 2 of the Shareholder's Basis Worksheet

Notes

  • Enter X in the Data share beginning basis and prior suspended losses in Screen 1120 to share the amounts listed above for all shareholders in the S Corporation.
  • In order for the financial data to share correctly, you must calculate the S Corporation return before opening the 1040 client in UltraTax/1040.

If this field is not marked, the amounts listed above are not shared with the 1040 client in UltraTax/1040.

Mark this checkbox to suppress the proforma of nondeductible expenses that are suspended due to shareholder basis limitations. This checkbox is available only when the Regulation 1.1367-1(g) election checkbox is not marked.

Under IRC Section 1366(d)(2)(A), any loss or deduction that is disallowed due to lack of basis carries over to the succeeding taxable year. The items that decrease basis and are subject to carryover in the following year are listed in IRC Section 1367(a)(2)(A) through (E). However, only IRC Section 1367(a)(2)(B) and (C) use the terms loss or deduction when describing separately stated and nonseparately stated items. IRC Section 1367(a)(2)(D) describes a nondeductible, noncapitalizable item as an expense.

Therefore, the wording of the code seems to suggest nondeductible, noncapitalizable items are not subject to the carryover provisions because they are items of expense, rather than items of loss or deduction.

However, if the shareholder makes the election to reduce basis by losses or deductions before nondeductible expenses, the shareholder must agree to carryover the nondeductible items to succeeding years.

If you believe nondeductible, noncapitalizable items should not carryover to the following year when the shareholder has not made the election under Regulation 1.1367-1(g), mark the Suppress proforma of nondeductible expenses checkbox for the respective shareholder in the View > Shareholder Information > Shareholder Basis > Suspended Losses tab. UltraTax CS proformas this checkbox the following year.

Mark this checkbox to suppress the sharing of the following information from Page 1 of the Shareholder Basis Worksheet to the 1040 client in UltraTax/1040.

  • Capital contributions
  • Other increases - Stock basis
  • Other decreases - Stock basis
  • Other increases - Loan basis
  • Other decreases - Loan basis
  • Beginning of year shareholder loan
  • Regulation 1.1367-1(g) election
  • Suppress 1367 election statement
  • Suppress proforma of nondeductible expenses

If you marked this checkbox and then decide that you want to share the above information, clear the checkbox and print preview the S Corporation return. UltraTax CS shares the information with the 1040 client in UltraTax/1040.

Note: Enter X in the Suppress data share of basis worksheet in Screen 1120 to suppress the sharing of the above information for all shareholders in the S Corporation.

Enter the nondeductible / noncapital expenses in this field. UltraTax CS reduces basis by the amount entered in this field before reducing the basis by the deductible items, unless you enter X in the Regulation 1.1367-1(g) election field. In that case, UltraTax CS reduces basis by the deductible items before the nondeductible / noncapital expenses.

Enter the suspended loss for these items. UltraTax CS calculates the amount of allowed loss by multiplying the basis available by a fraction, where the numerator is equal to the total loss amount (current-year plus suspended amount) for each deductible item, and the denominator is the sum of all deductible loss items (current-year plus suspended amount). This calculation is done for stock basis as well as loan basis.

Related topic: Shareholder Information > Shareholder Basis dialog

Share This