Calculating S Corp Stock and Debt Basis: Avoiding Loss Limitations and Excess Distributions

Recording of a 110-minute CPE webinar with Q&A

Conducted on Wednesday, August 16, 2017

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide tax professionals and advisers with the tools and understanding to correctly calculate S corp shareholders’ stock basis and debt basis and to effectively advise clients to avoid negative tax consequences due to loss limitations or excess distributions.


Calculating basis for S corporation shareholders is a time-consuming exercise for tax professionals. Accurately calculating basis is critical to determine how much a shareholder can withdraw in distributions without recognizing taxable income. When a shareholder takes more in distributions than his basis, the excess distribution is taxable as a capital gain.

Tracking basis is also important in determining whether shareholders can deduct S corporation losses on their personal returns. Taking losses in excess of basis can result in a disallowance of the pass-through loss and unexpected tax consequences.

Another challenge for the tax adviser is calculating S corp shareholder’s debt basis. A shareholder’s direct loan to the corporation creates debt basis that can be used to offset distribution gain or loss limitation rules. However, the use of debt basis must be tracked correctly and in accordance with debt basis rules, especially the new IRS regs on “back-to-back” loans.

Listen as our experienced panel of tax professionals provides a detailed roadmap of calculating stock basis, debt basis and the interrelation of distributions to basis, and outlines best practices to help S corp shareholders avoid unnecessary tax.



  1. Mechanics of calculating stock basis
  2. Items that increase stock basis
  3. Items that decrease stock basis
  4. Ordering rules
  5. Tracking basis against distributions to avoid current double taxation
  6. Loss limitation rules
  7. Debt basis rules and calculations
  8. Basis strategies for end of business


The panel will review these and other key issues:

  • Calculating and maintaining accurate S corp stock basis
  • Understanding basis items specific to S corporations
  • Applying loss limitation rules
  • Identifying and tracking debt basis
  • Calculating basis with a view toward sale, liquidation or redemption


Barnett, Robert
Robert S. Barnett

Capell Barnett Matalon & Schoenfeld

Mr. Barnett practice encompasses business and tax planning, estate planning and federal and state tax dispute...  |  Read More

Mills, Darren
Darren J. Mills, Esq., CPA

Mills Estate & Tax Law

Mr. Mills has more than 20 years of experience advising both middle market companies and large multi-nationals...  |  Read More

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