The draft Form 7203 instructions also includes a tip that reads, “It may be beneficial for shareholders to complete and retain Form 7203 even for years it is not required to be filed, as this will ensure their bases are consistently maintained year after year.” Who is responsible for maintaining tax basis? Receives a loan repayment from an S corporation.
The IRS recently issued the official draft Form 7203, S Corporation Shareholder Stock and Debt Basis Limitations. Here is what S corporation leaders need to know: New tax basis Form 7203 A new tax form is expected for 2021 that will bring even more questions from shareholders regarding tax basis. Unfortunately, in most situations neither the shareholder nor the S corporation have been tracking this. Have your S corporation shareholders been asking for their tax basis information the past couple of years? If so, were you able to provide it for them?Ī lot of S-corporation shareholders are asking because they have learned they needed to report this on their own return.