Mastering S Corporation At-Risk Loss Limitations: Beyond Calculations to Proactive Planning

Grouping Strategies, Aggregation, Mergers and Q-Sub Elections

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Wednesday, January 13, 2016

Recorded event now available

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Course Materials

This course will provide a deeper dive into the planning implications of S corporation at-risk loss limitations by giving tax advisers detailed strategies for avoiding negative tax outcomes by managing the limitations through often complex planning. The panel will discuss techniques such as grouping and qsub elections, as well as leverage contribution strategies to enable taxpayers to navigate around loss limitation rules to utilize current-year tax losses.


Taxpayers with ownership shares of an S corporation are subject to the “at-risk” loss limitation rules stated in IRC Secion 465. The Code specifies that a shareholder of an S corporation may only deduct losses from the S corp, but the deductions are limited to the amount the shareholder has “at risk” in a trade or business. Tax advisers must accurately identify at-risk amounts, as well as maintaining basis schedules and other calculations, in order to properly recognize current-year losses.

While the at-risk rules are designed to limit loss deductions, the regulations also provide planning opportunities for tax advisers to go beyond the calculations and offer tax saving strategies by leveraging exceptions to the at-risk provisions in Section 465, which are different than in other Code sections.

Among the strategies tax advisers must thoroughly understand are tracing rules for at-risk amounts where the taxpayer owns interests in multiple S corporations, activity aggregation and grouping rules, and merger of one S corporation with at-risk amounts with another S corp that does not have at-risk amounts. The tax strategies available are complex and require careful and sophisticated planning to avoid loss disallowance.

Listen as our expert panel goes beyond the calculations to provide practical guidance in the management of at-risk amounts and planning opportunities to maximize tax benefits working within the at-risk loss limitations.



  1. At-risk limitation rules
  2. What provides S corp shareholder with at-risk basis
  3. Tracing at-risk amounts by activity
  4. Grouping strategies
  5. Qsub
  6. Illustrations


The panel will discuss these and other critical topics:

  • The at-risk loss limitation rules of IRC 465, and how they differ from at-risk amount provisions in other sections of the Code
  • Basic overview of at-risk basis
  • Grouping of activities to reallocate at-risk amounts
  • Tracing rules
  • Strategies to free-up suspended loss carryover amounts
  • How to utilize mergers and QSSTs to avail a taxpayer of losses that would otherwise be subject to loss limitations


Barnett, Robert
Robert S. Barnett, JD, MS (Taxation), CPA

Capell Barnett Matalon & Schoenfeld

Mr. Barnett’s practice is highly concentrated in the areas of taxation, trusts, estates, corporate and...  |  Read More

Darren J. Mills
Darren J. Mills

Managing Director
Alvarez & Marsal Taxand

Mr. Mills has more than 20 years of experience advising both middle market companies and large multi-nationals...  |  Read More

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