Overview 2.0 Credits ONLINE Discuss, practically, 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 critical when an S corporation has a loss, and the shareholders wish to know whether they are entitled to fully utilize the loss allocated to them against their other income.
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
Major Topics 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
Prerequisite Basic understanding of tax rules relating to S corporations and S corporation shareholders
