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Tax Law (Questions About Taxes)/1231 or 1244 loss from S Corp sale


I sold entire S Corp share to a new owner and incurred loss.
1. Is this 1231 loss or 1244 loss?  I had this business for exactly 5 years.
2. If this is 1231 loss, can the excess loss (I have negative AGI), can I carry forward to next years? I don't want to carry back.
3. How do I let IRS know on my 2013 return of the carry forward amount?  Is my negative AGI considered as carryover loss?


As you state it, it would be a 1244 loss if you meet the criteria.  1231 is for the sale of assets and you stated that you sold shares, making it a securities transaction.

The carryforward amount would be reflected on Schedule D.  Negative AGI is not the carryover loss. The carry over loss is the amount of loss from the sale shown on Schedule D that you cannot deduct currently.

You are thinking about an NOL - net operating loss.  An NOL for an individual occurs when the AGI minus the standard or itemized deductions is a negative amount.  However, it is only an NOL if the negative amount is due to business deductions exceeding business income. Securities transactions are not business transactions in your case.

Hope this helps.

John Stancil, CPA

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John Stancil, CPA


I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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