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S Corp Basis - treasury stock

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    S Corp Basis - treasury stock

    If an S Corporation buys back stock and the Treasury stock is reflected on the balance sheet, does the amount of the treasury stock affect stock basis?

    #2
    Some info....

    See paragraph 4 of attached. (Not all inclusive of your scenario and further research required)

    An S corporation is a company structured under the sub-chapter S tax code of the Internal Revenue Service. This tax election allows the earnings to pass directly to the owners, thereby avoiding corporate income taxation. Subchapter S corporation rules allow for only one class of common stock and preferred stock is not ...
    Always cite your source for support to defend your opinion

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      #3
      Is not basis tracked at the stockholder's return?

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        #4
        Originally posted by JON View Post
        Is not basis tracked at the stockholder's return?
        Yes it is tracked at the shareholder. As an example if additional stock is contributed this increase equity of the S corporation and also the basis of the shareholder who contributed.

        So my question was if stock is bought back then how does it affect the shareholder basis in that S Corporation.

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