Surgent's Guide to Calculating S Corporation Shareholder Stock and Loan Basis

Overview

This program discusses, in a practical way, how an S corporation shareholder calculates their stock and loan basis on Form 7203. Form 7203 is the new IRS Form on which a shareholder is sometimes required to calculate their stock and loan basis. This topic is particularly important when an S corporation has a loss and the shareholders wish to know whether they are entitled to fully utilize the loss that has been allocated to them against their other income.

Highlights

• Introduction to Form 7203
• Introduction to the calculation of stock basis
• Introduction to the calculation of loan basis
• Taxable and nontaxable S corporation distributions to shareholders
• The election to reduce basis by deductible losses and expenses before reducing basis by nondeductible expenses

Prerequisites

Basic understanding of tax rules relating to S corporations and S corporation shareholders

Designed For

Any tax practitioner with S corporations or S corporation shareholders as clients

Objectives

• Calculate an S corporation shareholder's basis in his or her S corporation shares on Form 7203
• Understand and apply the S corporation shareholder loan basis rules

Preparation

None