S Corporation Basis: How to Calculate the Stock Basis (Completed)

Unlike a C corporation, each year a shareholder's stock basis in an S corporation increases or decreases based upon the S corporation's operations. If a shareholder receives a non-dividend distribution from an S corporation, the distribution is tax-free to the extent it does not exceed the shareholder's stock basis. Debt basis is not considered when determining the taxability of a distribution. This course will provide detailed training on the situations in which an S corporation shareholder’s basis is relevant, and how to calculate the stock basis.

Who Should Attend
Tax practitioners of all levels who provide advice and return preparation involving S corporations.

Topics Covered

• Allocations of income and loss and their effect on S corporation shareholder stock basis
• The relationship between stock basis and debt basis
• Situations in which S corporation shareholder basis is relevant, including distributions and sale of stock

Learning Objectives

• Describe the mechanics of calculating S corporation shareholder stock basis
• Recognize the effects of capital contributions, distributions and allocation of income and loss on S corporation shareholder stock basis
• Discuss intersection of debt basis and stock basis rules
• Identify tax basis issues that may arise upon sale of S corporation stock

Level
Basic

Instructional Method
Group: Internet-based

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None