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    shama08's Avatar
    shama08 Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Feb 8, 2008, 11:57 AM
    Loss Deduction
    I have a friend who has his own company. There are 3 partners in the company. It is a S corp LLC. They had contract with the other company to do some job for 1year. But they quit before 1 year and did not complete the job. The other company sued them. As a settlement they had to pay $70000.00. My friend resigned and he is no longer a partner of that company. He paid $16000.00 in settement in 2008 as per the agreement between the partners. Since he is no longer a partner he is not going to get K-1 for the loss of the company in 2008.

    Is there any way he can claim this $16000.00 on his 2008 personal taxes.

    Please let me know.

    Thanks,
    MV
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Feb 13, 2008, 12:17 PM
    MV:

    Even though he resigned prior to the end of 2007, he IS entitled to a K-1 to document the money he paid as part of the settlement. He just needs to make sure the company know that.
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