USA Closing C-Corp

[malch]

I am in the process of dissolving a C corp that is 100% owned by me. It has no significant assets.

I plan on taking a long term capital loss on the stock. It would likely qualify under Section 1244 but I don't think this is worth the hassle (loss is under $5k).

For most of this year, I have met the company operating expenses out of my pocket without reimbursement. By the time the dissolution is complete that will likely total around $5k including $800 CA state taxes for 2013.

How should I record those expenses on my 2013 personal taxes? Bad debt, unreimbused business expenses, or something else?

 

[The Finance Writer]

Well...it's not a bad debt unless you have a note for the amount you loaned. This deduction only helps if you itemize. Unreimbursed business expenses are subject to the 2% limitation.

The corporation can deduct the expenses and you can include your contributions as part of the capital loss. Using Section 1244 is not a "hassle" but it sounds like you will benefit from a tax professional who knows about the process. You'll want a tax expert anyway to handle the final 1120 for the corporation as well as your 1040.