Basis for Shareholders Self-Study

Summary

All shareholders in an S corporation are responsible for tracking their own basis in the S corporation. Primarily, to claim losses and deductions passed through on Schedule K-1, Shareholder’s Share of Income, Deductions, Credits, etc., or to receive tax-free distributions from the S corporation, shareholders must have basis and they must file Form 7203, S Corporation Shareholder Stock and Debt Basis Limitations. It’s important to establish basis so the IRS doesn’t argue the shareholder’s basis is zero. In this course, we introduce an example and explain how to track basis for an S corporation shareholder over a period of years.

Objectives

Upon completion of this course, you will be able to:

• Compute the shareholder’s stock and debt basis in an S corporation
• Summarize the rules for adjusting basis each year
• Complete Form 7203
• Reconstruct basis that has not been tracked for years

Course Details

This course includes an e-book and exam questions to help you earn CPE. CPE is issued after the exam is successfully completed.