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QUESTION DETAIL
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My S Corporation hasn't been paid an outstanding accounts receivable balance. We need to write-off the receivable as a bad debt. How is it reported at the company and shareholder level?
ANSWER
The BIDaWIZ Team's Answer:
Since S Corporations are pass through entities, the debt will be reported on line 1 of the shareholder's Schedule K-1. Please note that the amount you can deduct might be limited by the passive activity or at-risk rules.
