loss on form 1120S doesn't reduce taxes owed

Forum|Forum|1 year ago
February 28, 2025
2 replies
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hello

i have a S corp that i own 100% single member. i had a loss in 2024.

when i enter my K1 information into my personal tax return, it doesn't reduce the amount of taxes owed.

shouldn't i be able to deduct my loss and reduce my tax liability?

Update: this loss is in box 2 - real estate rental ... more research shows it can only be written off against other "passive income", so this might be the reason?

thank you!

TurboTax Home & Biz Windows

JamesG1

In TurboTax Premium Online, review the calculations at the screen S Corporation Basis (IRS Requirement).

IRS form 7203 maintains the basis computation. Your basis in the business must offset the loss before the loss may be taken on your personal 1040 income tax return.

A business loss is reported on line 11 in Part I.

@flmgrip

[Edited 03/03/25 | 7:07 pm PST]

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AmeliesUncle

Is the loss in Box 1? Did you tell the program that you "Materially Participate" in the business?

flmgripAuthor

Box 2 ... which might be the reason it doesn't reduce the taxes.

However my understanding is that a can carry over those losses indefinitely?

AmeliesUncle

Yes, rental losses may be limited. Yes, they will carry forward until there is passive income so they can be used (or the activity is sold in a fully taxable transaction).

As a side note, having real estate in a corporation is generally a bad idea. You may want to consult a good tax professional.