Corpie

Can I transfer losses from s-corp to personal tax returns. I am single owner of the s corp?

Also, if the s- corp has losses, do I still pay the tax ($800) on the s-corp.

The corporation is incorporated in california.

Public Comments

1. My understanding of a S corp is that all of it's income or loss passed through to you. So if the company makes one thousand dollars ans you have eight hundred in expenses you pay taxes on the two hundred profit. If you have one thousand dollars in expenses you pay tax on $0. Or if you show a loss for the year you pay no taxes on income from the company.
   
   
   
   California may have figured out some way to tax you for having a S corp that is additional to your income tax.
2. If you have net operating losses, i.e., the excess of deductible business expenses over business income, these are reported on Schedule E, and flow to Form 1040, line 17.
   
   
   
   An S Corporation is simply a C Corporation (also known as a
   
   standard business corporation) that files IRS form 2553 to elect a special tax status with the IRS. The articles of incorporation that are filed with CA are same whether a corporation is a C Corporation or S Corporation.
   
   
   
   They both are separate legal entities that are created by a state filing. Both offer the same limited liability protection, the owners are typically not personally responsible for the debts and liabilities of the business.
   
   
   
   Both entities are required to follow the same formalities. They
   
   must hold annual meetings of shareholders and directors each year and meeting minutes must be kept with the corporate records.
   
   
   
   However, an S-corp requires that the corporation's taxes and profits or losses are reflected in the personal income tax returns of the owners, whereas a C-corp requires separate filings for the business and for the owners.
   
   
   
   Make sure you are completing the appropriate forms, Schedule K-1, (Form 1120-S), which lists your share (here presumably 100% if you are the sole owner) of income or loss, deductions, and credits that must be reported on your return.
   
   
   
   Hope this helps.
3. Yes, you must pay CA the $800 tax. This tax has do with the business existing, not whether it had income or not.