[sweiner]

I am currently reviewing Unit 5 for REG – specifically, S corp and partnership basis – and I’m having trouble understanding how to compute the adjusted basis for shareholders and partners.

Specific S corporation questions:
Do direct shareholder loans to the S corporation increase that shareholder’s basis?
Why don’t S corporation loans or shareholder guarantees increase a shareholder’s basis?

If someone could give me a quick summary on what increases/decreases each basis that would be extremely helpful!

I would really appreciate any help! Thanks!

[monikernc]

That is a tough concept to master. I used the info on this website to help me grasp it and ran through many of the examples. It is a bit funky but very helpful…
https://tax.cchgroup.com/downloads/files/contemporary-tax-practice/M1-Partnership-Taxation/T1-Partnerships-General-Formation-Issues/A-Legal-Formalities.asp

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Author]

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