[canfinishthis2013]

can we net long-term capital losses against short-term capital gains? Thanks a lot.

FAR PASSED Feb 28, 2013
AUD Oct 27,2013
REG Jan 7,2014
BEC Nov 15,2013

[Gerg, CPA]

for an S-Corp, they flow through in total to the shareholder(s) – STCG netted against STCL, and same for LT

FAR - 1/26/2012 - PASSED (78, but Lost credit), re-do 11/27/2013 - PASSED (87)!
AUD - EPIC FAIL, 71, 69; 68; 5/25/2013 - PASSED (85)!
REG - 10/1/2012 - 72; 7/1/2013 - 73 UGH, 10/1/2013 - PASSED (85)!
BEC - 2/28/2013 - PASSED (82)!
Licensed CPA!

Used Becker self-study materials (just this for FAR original & REG #1), WileyTestBank, NINJA notes/audio, and Roger cram course for AUD #5, REG #3 & FAR reboot. CPA!

[canfinishthis2013]

why there's a MCQ in Becker

Stahl, an individual, owns 100% of Talon, an S corp. At the beginning of the year, Stahl's basis in Talon was $65,000. Talon reported the following items from operations during the current year:

Ordinary loss $10,000

Municipal interest income $6,000

Long-term capital gain $4,000

Short-term capital loss $9,000

Why Stahl's basis in Talon at year-end is $56,000?

Beginning basis: $65,000

+Income $6,000 (Tax-free income increases basis)

-Loss ($10,000)

-Net capital loss ($5,000) ($4,000 gain netted with $9,000 loss)

$56,000

can any CPA buddies explain this to me ?

FAR PASSED Feb 28, 2013
AUD Oct 27,2013
REG Jan 7,2014
BEC Nov 15,2013

[Gerg, CPA]

well yes you would do it the same way is your had a net LT loss and a net ST gain. an S corp is a flowthrough entity like a partnership, so a partner's basis would be their share of income/loss (even tax-free/nontaxable income) less any distributions that they received from the entity, plus any contributions that they made to the entity.

it does not matter whether you net out the ST gains/losses with LT losses/gains, you will get the same result. But the point i was making is that on the K-1 and tax return for the partner (Stahl), all of these items would be listed out separately.

FAR - 1/26/2012 - PASSED (78, but Lost credit), re-do 11/27/2013 - PASSED (87)!
AUD - EPIC FAIL, 71, 69; 68; 5/25/2013 - PASSED (85)!
REG - 10/1/2012 - 72; 7/1/2013 - 73 UGH, 10/1/2013 - PASSED (85)!
BEC - 2/28/2013 - PASSED (82)!
Licensed CPA!

Used Becker self-study materials (just this for FAR original & REG #1), WileyTestBank, NINJA notes/audio, and Roger cram course for AUD #5, REG #3 & FAR reboot. CPA!

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