Form 7203 Not correct

nondeductible expenses?  NDE is the typical acronym.

1. Nondeductible Expenses and Basis Calculation:

   • S Corporation Level: On the S Corporation's 7203 form, nondeductible expenses are used to adjust the shareholder's basis in the corporation. Nondeductible expenses decrease the basis, and tax-exempt income increases it. These adjustments ensure that the basis reflects the shareholder's economic interest in the S corporation.
   • Individual Level (Form 1040): When it comes to the individual's 1040 tax return, the nondeductible expenses themselves do not flow through since they are not deductible. However, the adjusted basis (which is affected by nondeductible expenses at the corporate level) is crucial for determining the amount of loss or deduction a shareholder can claim against other income on their individual tax return.

"two different basis...."  States have different laws from Federal. So different tax basis schedules are needed.

Form 7203 is the perfect place to learn about tax basis.

Is your beginning basis correct?

Enter cash distributions made from the Corp.

Enter property contributions made to the Corp.

Enter cash contributions made to the Corp