It's important for S
corporation shareholders to know their basis in the corporation. Basis is the
key to determining whether current-year losses can be deducted by the
shareholder or not. Losses in excess of basis are generally "suspended"
for use in later years when the business has income. Basis is also important
when shareholders plan to take nontaxable distributions. In cases where
distributions exceed investment in the company, the distributions can be taxed
as capital gain. Check your basis now to give yourself time to increase basis
if necessary and avoid a tax surprise at year-end.Monday, June 15, 2015
Business Tax Tip: Calculate your basis
Business Tax Tip: Calculate your basis
It's important for S
corporation shareholders to know their basis in the corporation. Basis is the
key to determining whether current-year losses can be deducted by the
shareholder or not. Losses in excess of basis are generally "suspended"
for use in later years when the business has income. Basis is also important
when shareholders plan to take nontaxable distributions. In cases where
distributions exceed investment in the company, the distributions can be taxed
as capital gain. Check your basis now to give yourself time to increase basis
if necessary and avoid a tax surprise at year-end.
It's important for S
corporation shareholders to know their basis in the corporation. Basis is the
key to determining whether current-year losses can be deducted by the
shareholder or not. Losses in excess of basis are generally "suspended"
for use in later years when the business has income. Basis is also important
when shareholders plan to take nontaxable distributions. In cases where
distributions exceed investment in the company, the distributions can be taxed
as capital gain. Check your basis now to give yourself time to increase basis
if necessary and avoid a tax surprise at year-end.
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