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

Overview

This program discusses, in a practical way, how an S corporation shareholder calculates his or her 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. Discussion includes the new IRS requirements to disclose an S corporation shareholder's basis under certain circumstances.

Prerequisites

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

Objectives

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

Highlights

• The requirement to attach a basis schedule to the Form 1040 for an S corporation shareholder claiming a loss
• How to determine S corporation shareholder stock and loan basis
• The positive and negative basis adjustments S corporation shareholders make and the order in which they are made
• The election to reduce basis by deductible losses and expenses before reducing basis by nondeductible expenses
• Shareholder loan basis rules