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Basis of S corporation Shareholder

How does the basis calculation of an S corporation shareholder basis differ from a partner and a partnership? Discuss any recent developments in the calculation of the S corporation shareholder's basis.

response is 415 words, includes references

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The S corporation basis calculation shareholder basis is stock value plus loans from the owners to the S corporation plus S corporation profits minus S corporation loss minus distribution to owners (www.macymorris.com). S corporation's basis seems important because the S corporation members cannot take out more money than they have put into the corporation and more than the corporation has earned without paying taxes. An S corporation member cannot take a loss on their taxes if they have a negative basis, but they do have to report profits on their taxes even with a negative basis.

In a partnership, there are two basis called the inside ...

Solution Summary

How the basis calculations of an S corporation shareholder basis differs from a partner and a partnerships is determined. The recent development in the calculations of the S corporation shareholder's basis is determined.