Question

Difference between S corp shareholder K1 Line 8a and 9 (Sect 1231) Gain

Forum|Forum|3 years ago
April 19, 2022
1 reply
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As a sole shareholder of an S corp, I can characterize a recent asset sale in the most beneficial legal way. I also personally have a large capital loss carryover from last year. Is there a difference between the Cap Gain shown on K1 Box 8a versus Box 9 as it relates to the passthru to my personal 1040 in order to reduce taxable income by claiming more than $3K of loss carryover?

Thank you

R

RobertB4444

No. Either of those passthroughs will simply add to your personal capital loss carryforward. Unless you have some capital gains to offset those losses then you can't use more than $3000 from them.

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K

KL369Author

Thank you @RobertB4444 . Just to clarify the S corp does have a cap gain. And so I'm thinking that when it flows thru K1 to personal 4797/Sch D that it will allow the -$30K Cap Loss carryover to offset the $23K Cap Gain, reducing 1040, Ln 7 and ultimately AGI. Am I understanding that correctly?

Thanks again.