Need help. My CPA says that I can buy excess losses from my relative’s S Corp and transfer them to my S Corp. for example I buy $80,000 of losses from my relative for $1 and then I can put it against my income. He said my relative’s S Corp can also loan me his losses as well. My relative has thousands of unused excess losses that he has accumulated over the years and he has receipts to prove it. Every accountant I talk to gives me a different answer and many don’t understand how my CPA says that I can buy losses and transfer them into my S corp. can you explain to me what my CPA is talking about?
Thank you for your helpful insights. Longtime listener of the podcast. According to form 461 under the definitions section it says trade or business and isn’t limited only to a business. Therefore would w2 income be able to be offset just like as k1 income can be offset? Thanks for your help
Thank you so much for the education. Really appreciated. Quick question, when the excess carries over to the next year does it get treated as active in the following year or do the investor have to qualify again as a REP?
Thanks and great question! The excess that is carried forward is considered an "NOL" so to answer your question directly, yes it's treated as active and you don't have to requalify as a REP.
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Need help. My CPA says that I can buy excess losses from my relative’s S Corp and transfer them to my S Corp. for example I buy $80,000 of losses from my relative for $1 and then I can put it against my income. He said my relative’s S Corp can also loan me his losses as well. My relative has thousands of unused excess losses that he has accumulated over the years and he has receipts to prove it. Every accountant I talk to gives me a different answer and many don’t understand how my CPA says that I can buy losses and transfer them into my S corp. can you explain to me what my CPA is talking about?
Hi, my company got two loans how can I fill those in the business taxes?
The loans I used to pay expenses
Very informative!
So I start an LLC and run a business and loose $50k on the year running the business I could offset my wife and i’s W-2 tax bill of $50k?
Thank you for your helpful insights. Longtime listener of the podcast. According to form 461 under the definitions section it says trade or business and isn’t limited only to a business. Therefore would w2 income be able to be offset just like as k1 income can be offset? Thanks for your help
Thank you so much for the education. Really appreciated. Quick question, when the excess carries over to the next year does it get treated as active in the following year or do the investor have to qualify again as a REP?
Thanks and great question! The excess that is carried forward is considered an "NOL" so to answer your question directly, yes it's treated as active and you don't have to requalify as a REP.