S corporation shareholders report income, losses and other items passed through from their corporation on their personal income tax return. The law limits losses and deductions to their basis in the corporation. Often shareholders may claim losses and deductions to which they are not entitled because they do not have sufficient stock or debt basis to absorb these items. The IRS has identified these issues as a priority compliance campaign.
In this session, you will learn to properly track shareholder basis using the AICPA’s S corporation shareholder basis worksheet available to tax section members. The session will also provide in depth general guidance on S corporation shareholder basis and traps for the unwary to avoid.