HRS § 235-125 — Carryforwards and carrybacks; loss limitation


[§235-125] Carryforwards and carrybacks;
loss limitation. (a) Carryforwards and carrybacks to and from taxable
periods of an S corporation shall be restricted in the manner provided in
section 1371(b) of the Internal Revenue Code.
(b) The aggregate amount of losses or
deductions of an S corporation taken into account by a shareholder pursuant to
section 235-122(c) shall not exceed the combined adjusted bases, determined in
accordance with section 235-124, of the shareholder in the stock and
indebtedness of the S corporation.
(c) Any loss or deduction which is disallowed
for a taxable period pursuant to subsection (b) shall be treated as incurred by
the corporation in the succeeding taxable period with respect to the
shareholder.
(d)(1) Any loss or deduction which is disallowed
pursuant to subsection (b) for the corporation's last taxable period as an S
corporation shall be treated as incurred by a shareholder on the last day of
any post-termination transition period.
(2) The aggregate amount of losses and deductions
taken into account by a shareholder pursuant to paragraph (1) shall not exceed
the adjusted basis of the shareholder in the stock of the corporation
(determined in accordance with section 235-124 at the close of the last day of
any post-termination transition period and without regard to this subsection).