S-corporation shareholder stock basis at beginning of year

Forum|Forum|4 years ago
April 6, 2022
1 reply
15 views

For a taxpayer with a Schedule K-1 (Form 1120-S), how do I determine the shareholder's stock basis at the beginning of the year when it is not given on the Schedule K-1?

ProConnect Tax

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abctax55

Level 15

Ask the preparer of the S-Corp return.

Ask your client.

Recreate the info from looking at all years that the K-1 has been provided (that ownership has existed.

Bonus - determine if there's any 'outside' basis.

HumanKind... Be Both

N

nmmsAuthor

Level 5

Tax year 2021 is the first year the company is an S-Corporation. It was a Partnership from tax years 2018 through 2020. The Schedule K-1 (Form 1065) provided a Basis Worksheet that was not included with the Schedule K-1 (Form 1120-S).

sjrcpa

Level 15

Then you have a starting basis for the S Corp .

Neither an S Corp or a partnership is required to provide basis schedules to the shareholders/partners although many do.

It is the responsibility of the shareholder/partner to keep track of their basis. Usually that means the tax return preparer does it.

EDIT: Remember that the shareholder won't get basis for liabilities so remove those to the extent included in the ending partnership basis schedule.

The more I know the more I don’t know.

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