Basis in an S Corporation is a critical factor to consider, as it directly affects the tax treatment of distributions and the deductibility of corporate losses on personal tax returns. To make these declarations, shareholders must use Form 7203 on individual tax returns and must file this form in most situations to report their basis in the corporation.

At its most basic level, basis is simple enough to calculate, but one can quickly get into the weeds. This course takes a straightforward approach to explain basis, how it is calculated, and how to properly fill out Form 7203.

Learning Objectives:

• Define S Corporation basis and explain how it differs from partnership basis


• Calculate increases and decreases to basis


• Report with accuracy the taxability and deductibility of shareholder distributions


• Recognize when Form 7203 is required and correctly complete the form when needed


• Summarize how to deal with shareholder loans

NASBA Approved

CPAacademy.org (Sponsor Id#: 111889) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

CPAacademy.org 1685 S. Colorado Blvd, Suite #205, Denver, CO 80222

EA Approved

CPAacademy.org (Sponsor Id#: HURS9) has entered into an agreement with the Internal Revenue Service, to meet the requirements of 31 Code of Federal Regulations, section 10.6(g), covering maintenance of attendance records, retention of program outlines, qualifications of instructors, and length of class hours. This agreement does not constitute an endorsement by the IRS as to the quality of the program or its contribution to the professional competence of the enrolled individual. Credit earned by attendees with a PTIN will be reported directly to the IRS as required of all providers. To ensure your CPE hours are reported, update your profile in My Account to include your PTIN number. Please note: IRS CE is only mandatory for EAs and ERPAs. For all other tax return preparers, CE is voluntary.

CPAacademy.org 1685 S. Colorado Blvd, Suite #205, Denver, CO 80222