Taxpayer’s loss not allowed

The sole shareholder of an S corp guaranteed a loan taken out by the business. Years later, the company liquidated, but operations continued under the S corp’s name, and the borrower renewed the debt. On his return, the taxpayer reported a loss, claiming he’d assumed the note as guarantor after the liquidation and that created sufficient basis. The U.S. Tax Court ruled that the debt remained after the liquidation and the S corp was the “primary obligor.” Therefore, the taxpayer couldn’t claim a loss. (TC Summ Op 2017-9)