Basis Basics for S Corporation Shareholders
Author: James R. Hamill
| CPE Credit: |
1 hour for CPAs
1 hour Federal Tax Related for EAs and OTRPs
1 hour Federal Tax Law for CTEC |
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2028 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
Shareholder basis in the stock and debt of an S corporation is vital for three reasons: First, under Section 1366, a shareholder may only utilize losses to the extent of the basis in the stock and debt. In addition, when a shareholder sells stock, basis in the stock will help determine the gain or loss resulting from the sale. Lastly, the shareholder's basis in S corporation stock will, in part, determine the taxability of any distributions made by the corporation to the shareholder.
In this one-hour CPE course, nationally recognized tax expert and instructor James Hamill, CPA, Ph.D., will walk you through the basics of a shareholder's basis in both the stock and the debt of the S corporation.
Publication Date: April 2025
Designed For
All tax professionals who advise clients on tax planning issues will benefit from this webinar.
Topics Covered
- S Corporation Basic Issues
- Why Avoid Open Account?
- Ordering of Basis Adjustments
- Excess PTE Loss Treatment
- How to Apply the Suspense Account
- Stock Basis Initial Computation
- Suspended Loss Treatment
- Tracking Basis
- AAA Versus Basis
- Creating Debt Basis
- Back-to-Back Loan Strategy
- Back-to-Back Loan Summary
- Entity Approach: Form Dominates Substance
- Creating Debt Basis?
- S Corporation Distributions
Learning Objectives
- Identify the importance of a shareholder's basis in the stock and debt of an S corporation
- Recognize how to compute stock and debt basis
- Identify the role stock and debt basis play in utilizing S corporation losses
- Recognize the steps in ordering of basis adjustments
- Identify a strategy in which the individual S shareholder borrows funds from the bank and then lends the money to the S Corporation
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (1 hour)
Program Prerequisites
None
Advance Preparation
None
