Understanding how to calculate S Corporation shareholder stock basis accurately is extremely important. A shareholder may only utilize losses to the extent of basis in stock and in bona fide debt owed from the S Corporation to the shareholder. Further, the shareholder's basis in S corporation stock is important to determining the taxability of any distributions made by the corporation to the shareholder. And of course, stock basis helps determine gain or loss on the ultimate sale of the S corporation stock, including in an exit strategy transaction such as an acquisition.
This course covers the rules for calculating S corporation shareholder stock basis, including initial basis, adjustments for income and losses and distributions, and the ordering rules for adjustments. We will use realistic examples to discuss common scenarios.
Instructional MethodGroup: Internet-based
NASBA Field of Study
Taxes (2 hours)