S Corp Stock Basis

[DONNA ASTON]

The inhouse CPA who did not prepare the 1120S is saying there should be a loss on Sch D of the 1040 and the distribution on the K-1 should not be included in calculating stock basis for this client. I was not in agreement because I felt I did not have the pieces to put this together but was seeking other professional opinion. I think at this point this client needs to move on to someone they are will to provide the whole picture to. This is a first year client.

[BHoffman]

Thank you for responding so quickly. No I did not prepare the S corp return and having a hard time due to the client relations with the CPA that did prepare it. I do not have a worksheet with the 2008 ending stock basis and don't know if it is attainable at this point. Any suggesstions.

Have you looked through the paperwork carefully? Maybe the CPA included the worksheet.

The only way I know is to prepare a worksheet for every year the shareholder owned stock in the SCorp. Here is a link to the instructions for form K1S: The worksheet is on page 2.

http://www.irs.gov/pub/irs-pdf/i1120ssk.pdf

You'll need to be very careful and study hard to understand the things that increase and decrease basis. You'll also need to keep the worksheets as proof of basis should you need to justify your numbers.

[DONNA ASTON]

Thank you for responding so quickly. No I did not prepare the S corp return and having a hard time due to the client relations with the CPA that did prepare it. I do not have a worksheet with the 2008 ending stock basis and don't know if it is attainable at this point. Any suggesstions.

[BHoffman]

Hi Donna - this question is probably much too complicated to be answered in a forum. The K1 does not have the information you need to determine the shareholder's stock basis. Did you prepare the 1120S form for the shareholder? If not, you might be able to get a shareholder basis worksheet from the person who did prepare it.

[DONNA ASTON]

I need some help on the sale of stock for an s corp client.

Here is the situation:

K-1 with the following numbers:

Ordinary business income (loss): -30189

interest income: 292
unrecaptured sec 1250 gain 872
1231 gain 108,915

Box 16D: 184,114

received check of 213,000

I am having a moment and second guessing the stock basis amount on Sch D of the 1040.

Could someone out there give me a hand and I know we are all swamped but any info would help.

Thanks