Liquidating vs nonliquidating distributions Daddy sex chats

03-Aug-2017 09:18

Is it sufficient for S corporation shareholders to maintain basis by the various blocks of stock purchased?Although not answered directly, the proposed regulations are developed within a context that would require shareholders to separately maintain basis for each share of stock held.Since losses flow through on the basis of the percentage of stock ownership, acquisition of additional stock will also increase the shareholder's proportionate amount of losses.In addition, a loan from a shareholder to the corporation gives basis to the lending shareholder.The stock basis is reduced by the amount of any separately or non-separately stated loss items.Finally, the tax effect of any distributions the shareholder received during the year is determined.

Additional cash contributions or the acquisition of corpo- rate stock will increase a shareholder's stock basis.

The amount of the tax basis determines the tax treatment of such items as flow-through losses and corporate distributions.

Many S shareholders have two investments in the corporation - the investment in corporate stock and loans made to the corporation.

The proposals list an ordering rule for the adjustment, either increases or decreases, of stock basis.

They also include provisions on the timing of basis adjustments, basis computations during a loss year, computation of individual stock basis and the categorization of debt as basis.What is the January 1, 1993, tax basis for her stock? OPERATINGRESULTS Year Ended December31,1992 Ordinaryincome8,000 Rentalrealestateloss(37,000) Interestincome8,000 Netlong-termcapitalgain22,000 Charitablecontributions(3,000) Section170expense(7,000) Shareholder'sportionofmedicalinsurancepremiums(1,200) Non-deductibleportionofcorporationmealsand entertainmentexpense(6,000) Keypersonlifeinsurancepremiums(9,000) Even though the nondeductible items do not reduce Linda's current taxable income from the corporation, they do reduce her stock basis.

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