2024 S Corporations: How to Calculate Shareholder Basis

Overview

A detailed analysis of the calculations related to determining a shareholder's tax basis for S corporation shares and loans. How to use the Form 1120S, Schedule K-1 information for basis determination. An illustrative example demonstrates how the process works, as well as the many potential pitfalls.

**Please Note: If you need credit reported to the IRS for this IRS approved program, please download the IRS CE request form on the Course Materials Tab and submit to kori.herrera@acpen.com.

Highlights

Discuss the calculation of basis when the entity is formed including the impact of contributed property
Explain the importance of shareholder loans to the entity
Uses a comprehensive example to illustrate the mechanics of the basis determination process
Discuss how basis is impacted by distributions of corporation property
Explain how basis is impacted by sale/or liquidation of the S corporation interest
Discuss how S corporation losses impact Form 1040 Schedule E reporting
Show how to get from the Schedule K-1 information to the basis calculations

Prerequisites

Basic working knowledge of business and S corporation taxation

Designed For

CPAs working in public accounting firms and/or working for S corporations

Objectives

Identify the tax issues related to S corporation owner's basis for shares and loans from formation through operations and concluding with sale and/or liquidation