(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.
Terms Used In Hawaii Revised Statutes 235-125
Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
Post-termination transition period: means that period defined in section 1377(b)(1) of the Internal Revenue Code. See Hawaii Revised Statutes 235-121
S corporation: means a corporation for which a valid election under section 1362(a) of the Internal Revenue Code is in effect. See Hawaii Revised Statutes 235-121
Taxable period: means any taxable year or portion of a taxable year during which a corporation is an S corporation. See Hawaii Revised Statutes 235-121
(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 § 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 § 235-124 at the close of the last day of any post-termination transition period and without regard to this subsection).
