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

Overview

This program discusses, in a practical way, how an S corporation shareholder calculates their stock and loan basis on Form 7203. Form 7203 is the IRS Form on which a shareholder is sometimes required to calculate their 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.

Highlights

Introduction to Form 7203
Introduction to the calculation of stock basis
Introduction to the calculation of loan basis
Taxable and nontaxable S corporation distributions to shareholders
The election to reduce basis by deductible losses and expenses before reducing basis by nondeductible expenses

Prerequisites

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

Designed For

Any tax practitioner with S corporations or S corporation shareholders as clients

Objectives

Calculate an S corporation shareholder's basis in his or her S corporation shares on Form 7203
Understand and apply the S corporation shareholder loan basis rules