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Level 5
January 18, 2024
Solved

will Treasury stocks reduce remaining S-corp shareholders' stock basis

  • January 18, 2024
  • 1 reply
  • 10 views

S-corp bought out departing shareholder and retired treasury stocks.  This reduces total shareholders' equity.  Will each remaining shareholder's stock basis also reduced?

Or, there is no change to remaining shareholders' stock basis.  Hence, total remaining shareholders stock basis (costs) are higher than total shareholders' equity?

Thanks.

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Best answer by IRonMaN

It just affects the departing shareholder.  It shouldn't affect the basis of the remaining shareholders.

1 reply

IRonMaN
IRonMaNAnswer
Level 15
January 18, 2024

It just affects the departing shareholder.  It shouldn't affect the basis of the remaining shareholders.

Slava Ukraini!
hgtcAuthor
Level 5
January 18, 2024

Thanks.

IRonMaN
Level 15
January 18, 2024

You betcha!

Slava Ukraini!