Reconstructing S-Corp basis

[Max W]

All the K-1's are available and the initial basis is known.  After adding each years gains and losses there is about a $4000 increase in basis.

However, distribution (Box 16d) is greater than the gains.  What else other than return of capital would account for this?   (Sec 179 is accounted for).

[DANRVAN]

On 3/20/2020 at 5:51 PM, Max W said:

However, distribution (Box 16d) is greater than the gains. 

I am not sure what you are asking Max.  Are you saying the distribution is greater than the basis?  

[Max W]

1 hour ago, DANRVAN said:

I am not sure what you are asking Max.  Are you saying the distribution is greater than the basis?  

For a particular year the the non-dividend distribution is $2500 which decreases basis.  The Box 1 income is $1000, which increases basis. So, would not the net change to basis be -$1500  ($1000-2500) ?

The basis is $50K, so there is no need to to consider deductions to basis as exceeding the basis.

 

[Abby Normal]

All income, tax and nontaxable, increases stock basis. All deductions, deductible and nondeductible, decrease basis, as do distributions, of course. Just not below zero.

[Max W]

So, my example is correct.