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C corp conversion to S Corp , capital loss question

I was told when I converted from a C corp 3 years ago to an S corp to get appraisal values on all the real estate which I did. Now I find that 3 years later some of the properties have decreased by 20%.
1. Can I make use of this "negative capital gain". otherwise what was the purpose of valuing the properties at the time of the conversion.
I am being told roughly 35% of the sale value as it is all written off to the corp and then the distribution is taxed at my income level and not at a dividend level or at a capital gains level.

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