Capital loss and make company inactive?

Sep 11, 2007 3 Replies
N

Hi, asking a question for a friend:



her company (c corp in new york) has big capital loss, she plans to retire so wants to shut down the company, but that will "waste" the capital loss, so the questions are:


  1. is there a way to make use of the capital loss, any financial instrument or something like that?


  1. if no, what about if she makes the company inactive, just hold some stocks and hopefully the stocks will appreciate in value thus offset by the captital loss

  2. is there annual cost of an inactive company? does she need to file tax (and pay high CPA fee) annually still?

thank you very much!



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J

There are ways to use a c corp loss to offset other income but the rules are complicated. You could ask in tax group (misc.taxes.moderated) but your best advice may be to seek a qualified tax professional before she closes the books and the corporation is not legally registered in the state.

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N

thanks, I posted same question there any pointer will be appreciated

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~

yep, when you go to shift % of ownership, the IRS hase some rules that kick in and cause many issues to arise...map out the plan w/care...as much $$ can be at stake...

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