A detailed analysis of the calculations related to determining a shareholder's tax basis for S corporation shares and loans. How to use the Form 1120S, Schedule K-1 information for basis determination, as well as an update on Schedules K-2 and K-3. An illustrative example demonstrates how the process works, as well as the many potential pitfalls.
*Please Note: If you need credit reported to the IRS for this IRS approved program, please download the IRS CE request form on the Course Materials Tab and submit to kori.herrera@acpen.com
DESIGNED FOR
CPAs working in public accounting firms and/or working for an S corporation
BENEFITS
- Apply recent legislative development impacting S corporations and their shareholders
- Identify the tax issues related to S corporation owner's basis for shares and loans from formation through operations and concluding with sale and/or liquidation
HIGHLIGHTS
- Discuss the calculation of basis when the entity is formed including the impact of contributed property
- Explain the importance of shareholder loans to the entity
- Uses a comprehensive example to illustrate the mechanics of the basis determination process
- Schedules K-2 and K-3
- Discuss how basis is impacted by distributions of corporation property
- Explain how basis is impacted by sale/or liquidation of the S corporation interest
- S corporation losses and how they impact Form 1040 Schedule E reporting
- Show how to get from the Schedule K-1 information to the basis calculations
- Comprehensive example to illustrate the mechanics of the basis determination process
PREREQUISITES
Basic working knowledge of S corporation taxation
ADVANCE PREPARATION
None