Sunday, January 31, 2016

Figuring a Shareholder's Basis

The Calculation for figuring shareholder basis is as follows:
1) Beginning Stock Basis (cost or FMV of Stock)

Increases to Basis
2) Money or property contributed to the corporation
3) Your percentage of a corporation's  earnings (or a decrease if the corporation sustains loses)
4) Other increases, such as your share of excess deductions of a depleatible asset

Decreases to Basis
5) Distributions of money and FMV of property
6) Your share of the corporation's nondeductible expenses, if applicable, your share of corp loses under Reg section 1.1367-1(g), your share of the Sec 179 deduction, or any corporation charitable deductions
7) If Reg Section 1.1367-1(g) applies, add the amount of a corp's nondeductible expenses
8) The smaller of the excess, at 1/1/xx, of the amount you are owed for loans you made to the corp OR the sum of lines 1-7 above.  (This amount increases you loan basis)

9) Equals: Your stock basis in the corporation at the end of the year..

We would love to help with the computation!  Call me at my cell to talk more (813)309-0504.