cred65 Posted May 25, 2011 Report Share Posted May 25, 2011 The shareholders (3) of an S corp. (which I did not represent) had $400K in accumulated suspended losses for 2000-2006. The assets of the company were sold and the tax preparer sent final K-1’s to the shareholders (I represent 2) reporting $765K in Sec. 1231 capital gains. Q. How are the suspended losses treated on the individual’s returns; As ordinary loss on Sch. E pg 2, or as capital loss on Sch. D? TIA Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted May 28, 2011 Report Share Posted May 28, 2011 As I understand the facts, these suspended losses were ordinary, and thus would be reported on the E page 2. Quote Link to comment Share on other sites More sharing options...
TAXBILLY Posted May 29, 2011 Report Share Posted May 29, 2011 Agree with KC. The losses retain their original character. A more familiar situation is suspended losses from rental property. taxbilly Quote Link to comment Share on other sites More sharing options...
cred65 Posted May 30, 2011 Author Report Share Posted May 30, 2011 Thanks KC & Taxbilly. That was my first choice. Quote Link to comment Share on other sites More sharing options...
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