The IRS released a practice unit on initial stock basis for an S corporation shareholder. The unit begins as follows:
Shareholders must establish the amount of their stock basis when:
- The S corporation allocates a loss or deduction item to the shareholder,
- The S corporation makes a non-dividend distribution to the shareholder, or
- The shareholder sells, exchanges, or otherwise disposes of stock.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.