Understanding Basis for Shareholders

2 CPE for AFSP, EA, CFP®, CPA, CRTP  

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All shareholders in an S corporation are responsible for tracking their own basis in the S corporation. 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 file Form 7203, S Corporation Shareholder Stock and Debt Basis Limitations. During this session, we will review increases and decreases to shareholder basis as well as walk through completing Form 7203.