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2023 March Solutions Room: S Corporation Basis Rules and Form 7203
This webinar reviews the rules for the computation of shareholder basis in S corporation stock and indebtedness, how the allowable amounts of loss and deduction are determined in a year when there is a basis limitation, and the basis restoration rules that apply to shareholder loans. Form 7203, S Corporation Shareholder Stock and Debt Basis Limitations, will be reviewed with examples showing the form’s proper completion.
- Properly determine a client’s initial basis in S corporation stock and in loans made to an S corporation.
- Compute the adjustments to stock basis for items of income, loss, deduction, and distributions.
- Compute the adjustments to loans made to the S corporation for allowable items of loss and deduction in excess of stock basis and how loan basis is subsequently restored.
- Determine when gain must be reported for non-dividend distributions in excess of stock basis and determine the character and amount of gain reportable for repayments of reduced basis debt.
- Properly compute the allowed items of loss and deduction in a year where basis limitations apply and how the election under Reg. § 1.1367-1(g) impacts the computation.
- Know when Form 7203 is required to be filed and Properly complete Form 7203.