Discussion:Rental property with suspended losses contributed to S Corporation
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Discussion Forum Index --> Tax Questions --> Rental property with suspended losses contributed to S Corporation
| 12 April 2008 | |
| How are suspended losses handled when an individual owns rental property with suspended losses, creates an S Corp. and then contributes property to S corp? | |
Nancyshoemake (talk|edits) said: | 12 April 2008 |
| my understanding about suspended losses is that are not realized until final year...just changed structure... | |
| 12 April 2008 | |
| Hopefully, you are looking at this for 2008. Why are you putting rental property into an S-corp?!?!? | |
RoyDaleOne (talk|edits) said: | 12 April 2008 |
| Profile please. | |
| 12 April 2008 | |
| This is for 2008. Client wanted liability protection. I understand that suspended losses are personal to client. There are several properties. Up to 2006 there were no suspended losses. Just finished 2007 1040 and of course, now this issue comes up. I know I have to continue depreciation on same schedule...that's not a problem. But how in ProSeries will I keep suspended losses on properties that will no longer be "active" in terms of a Schedule E? I'm new to forum, will put in profile. Thanks for any help. | |
| 12 April 2008 | |
| Sorry to ask at this time for 2008 problem, but client hasn't yet transfered property to S Corp, and want to stop him if his suspended loses become frozen, as Nancyshoemake is suggesting. I didn't think so, but don't want a misstep. | |
| 12 April 2008 | |
| Warning. Do not put real estate property in a S or C Corp. Use LLC. Don't use ProSeries unable to address that issue. | |
| 12 April 2008 | |
| Client already formed as, his attorney recommended it. I'm sure he won't go to an LLC. Complained about the cost of forming corp already. Why do you think LLC is better? | |
| 12 April 2008 | |
| Type property in corporation into the yellow box and read the comments. Case closed. | |
| 12 April 2008 | |
| Don't see relevancy here. Discussion regarding getting property out of C corporation...not a problem here, no taxable dividend or property distribution. Income or loss on rental line of K-1, flows through to Schedule E page 2 as rental income(loss). If property sold, capital gain also flows through from K-1. Second discussion around not taking management salary in S Corp. Again not an issue... if rental property incurs losses, can't see IRS having an issue with no salary on 1120S. I realize that the LLC might have been preferred vehicle, but still not even sure why, so how could I articulate that to client? | |
| 12 April 2008 | |
| We've obviously gone off topic, but I appreciate the help you all are giving me. | |
| April 12, 2008 | |
| Shoot the attorney and self if necessary. NEVER EVER NO NOT EVER put RE into a corp. EVER. Is that clear? Search threads for reasons. That is grounds for malpractice and I'll be happy to testify. For free. | |
| 12 April 2008 | |
| I would have thought that a CPA since 1992 might have come up against this topic in his CPE somewhere.
What CPE are people taking that is obviously not preparing them to help thier clients? | |
| 12 April 2008 | |
| My father-in-law did when he started his business in 1955. But why would you do it now? | |
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