2011 Hawaii Code
DIVISION 1. GOVERNMENT
TITLE 14. TAXATION
235. Income Tax Law
§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). [L 1990, c 16, pt of §1]