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Posted by ns66ns on September 12, 2007, 10:05 pm
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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?
2. 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
3. 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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Posted by Seth on September 15, 2007, 3:53 am
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> 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?
She can take everything out of the company except the
capital loss, and then see if any profitable company (one
with a capital gain) wants to merge with it to save on
taxes.
Seth
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Seth on September 16, 2007, 3:52 am
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>
>> 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?
>
>She can take everything out of the company except the
>capital loss, and then see if any profitable company (one
>with a capital gain) wants to merge with it to save on
>taxes.
I've been informed that it isn't quite that easy any more; the IRS has
to believe that the merged company will continue to carry on the
business of the merger partner with the loss.
Seth
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Benjamin Yazersky CPA on September 23, 2007, 7:44 pm
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> 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?
>
> 2. 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
>
> 3. 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!
As long as the corp exists, not liqidated, it needs to file
Fed & state tax returns each year. There will be a state
franchise tax to pay. As an inactive corp, the tax
preparation fees would likely be lower.
Would have to look at the facts & cirucmstances to see if
liquitdating would provide a capital loss to the
shareholder(s).
___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] >>>
-----> real address on hobokeni or hobokenx <-----
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by John L on September 24, 2007, 8:47 pm
Please log in for more thread options >> 3. is there annual cost of an inactive company? does she
>> need to file tax (and pay high CPA fee) annually still?
In New York, you can file a final franchise tax return, then
your corporation can remain alive but inactive and pay no
tax (other than the biennial department of state form which
costs $9) for two years before the state dissolves it. If
during those two years you want to reactivate the
corporation, you can retroactively amend your return to make
it not final. This two year grace period is new, effective
in 2006.
Alternatively, you can keep your corp active by filing an
annual franchise tax form and paying the $100/yr minimum.
If you have no income and no expenses, I would expect the
federal 1120-S (two pages) and state CT-4 (four pages) would
be simple enough that you could fill them out yourself.
Regards,
John Levine, johnl@iecc.com, Primary Perpetrator of "The Internet for Dummies",
Information Superhighwayman wanna-be, http://www.johnlevine.com, ex-Mayor
"More Wiener schnitzel, please", said Tom, revealingly.
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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