A detailed analysis of the calculations related to determining an S shareholder's tax basis for S corporation shares using the Form 1120S, Schedule K-1 information. An illustrative example demonstrates how the process works, as well as the many potential pitfalls.
CPAs working in public accounting firms and/or working for S corporations.
To provide a thorough review and update of the tax issues related to S corporation owner's basis from formation through operations and concluding with sale and/or liquidation.
- Discusses the calculation of basis when the entity is formed including the impact of contributed property.
- Explains the importance of shareholder loans to the entity.
- Uses a comprehensive example to illustrate the mechanics of the basis determination process.
- Discusses how basis is impacted by distributions of corporation property.
- Explains how basis is impacted by sale/or liquidation of the S corporation interest.
- Shows how to get from the Schedule K-1 information to the basis calculations.