S Corporation Shareholder Basis

Free CPA REG (Taxation & Regulation) lesson in Federal Taxation of Entities. 16 min read, ~2,412 words.

Stock basis starts at cash cost or the carryover adjusted basis of §351 contributed property, never FMV. Annual stock basis: add pro rata income (including tax-exempt), subtract distributions, subtract nondeductible expenses, subtract deductible losses. Never below zero. Adjustment order: (1) income, (2) distributions, (3) nondeductible expenses, (4) losses. Debt basis...

What this lesson covers

• Content
• Example 1
• Common Mistakes
• Check Your Understanding
• Exam Shortcuts

Learning objectives

• V.C3

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