The following details are for Company A which is an LTC:
|
IRD number |
12–345–678 |
|
Total gross income |
$6,000 |
|
Expenses/deductions |
$10,000 |
|
Loss |
$4,000 |
|
One owner (shareholder): |
Sam (100%) |
|
IRD number |
91–111–213 |
|
Sam’s owner’s basis |
$5,500.00 |
Company A is in a partnership with another LTC.
Calculate the non-allowable deductions for Sam:
Box 3 is Sam’s non-allowable deductions this year. The amount in Box 3 ($4,500) is shown at Box 24O.
Box 5 is Sam’s non-allowable deductions to carry forward. The amount in Box 5 ($4,500) is shown at Box 24R.
Company A’s IR7L would look like this:
Sam’s Individual income tax return (IR3) Question 19 would look like this:
Sam’s adjusted LTC income is in effect calculated by subtracting his allowable deductions ($5,500) from Company A’s gross income ($6,000) = $500.