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Is S-Corp stock basis shared by spouses?

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    Is S-Corp stock basis shared by spouses?

    Husband and wife are two of the four shareholders of an S-Corp and each own about 35%. Husband has ~5K stock basis, wife has ~33K stock basis. There is no debt basis. S-Corp has ~20K losses this year, about 14K of which will pass to the husband and wife, split about evenly between the two.

    I know that constructive ownership/attribution rules make the shares held by one deemed to be held by the other. Does this also apply to stock basis, so that they can deduct the entire 14K on their joint return, or will the husband's deduction be limited to his current basis with 2K suspended while the wife can deduct the entire 7K?

    Thanks!
    --
    James C. Samans ("Jamie")
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