IRS Releases Practice Unit on Adjustments to Debt Basis for S Corporations
The U.S. IRS has released an international practice unit on Adjustments to Debt Basis for S corporations. Debt basis must be tracked separately from stock basis and is used in determining the taxability of loan repayments. It is important that shareholders know the amount of their debt basis when:
- The S corporation allocates a loss or deduction item to the shareholder;
- The S corporation makes…