Issues with Corporate closing

Discussion in 'Small Business Helper' started by samachar, Mar 4, 2005.

  1. samachar

    samachar Guest

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    :confused: I want to close my corporation C. I have filled out forms such as 966 and 1120 but don't know how to distribut loses to my shareholders. Everywhere that I searched talked about K1 which is for S type corporation or for partenerships. I am really confused taht how to file returns and claim loses while filling personal tax return.
    Any help would be appreciated...........
     
  2. tsbhelper

    tsbhelper Small Business Helper Forum Moderator

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    Samachar,

    It has been my understanding that you cannot distribute losses to shareholders of a C type corporation. This may very well be why there are no appropriate forms to fill out.

    The C type corporation is a separate entity unto itself. The shareholders own stock in the corporation. They may receive dividends, but by the same principle that they are protected from any personal liability (the corporate veil), they cannot take any of the losses that the corporation experiences and carry them over to their personal tax returns.

    The only time I ever had to deal with this situation was back in 1983, and the rules may have changed somewhat since then, so don't take this answer as final.

    The Small Business Helper
     

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