Shareholder Loan Basis?

[David]

New client's prior year S Corp basis statement doesn't report shareholder loan basis and reports zero stock basis.

 

However, client's (100% shareholder of the S Corp) prior year personal tax return reports shareholder loan basis on the basis worksheet which carries to Form 6198.

 

The shareholder basis appears to be the 401K profit sharing payable balance at the end of the year. This doesn't seem to be the proper way to report this. I would think that if there is no shareholder loan basis reported on the S Corp's tax return, then there shouldn't be loan basis reported on the personal return.

 

Has anyone seen this treatment and can explain it to me?

 

If this has been handled incorrectly in the past, will it raise any flags if I don't carry forward the 2012 numbers on Form 6198?

 

Thanks for your help with this.

[David]

Does anyone know anything about this?

 

Thanks.