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

Note: CLE credit is not offered on this program

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

Conducted on Wednesday, February 13, 2019

Recorded event now available

or call 1-800-926-7926
Course Materials

This course will provide tax professionals and advisers with the tools and understanding to correctly calculate S corp shareholders' stock basis and debt basis and to advise clients to avoid adverse 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 essential in determining whether shareholders can deduct S corporation losses on their personal returns. Taking losses more than 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 shareholders' 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 according to 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, CPA

Capell Barnett Matalon & Schoenfeld

Mr. Barnett’s practice is highly concentrated in the areas of taxation, trusts, estates, corporate and...  |  Read More

Daiell, Katy
Katy Daiell, CPA, MST


Ms. Daiell has more than 10 years of experience working with public and private clients of varying size and complexity....  |  Read More

Gilden, Robin
Robin C. Gilden

Mitchell Silberberg & Knupp

Ms. Gilden is one of the most dedicated tax attorneys in her areas of expertise. From federal income tax to Section...  |  Read More

Access Anytime, Anywhere

CPE credit is not available on downloads.