Information about shareholder and debt basis

The Code establishes the order in which the transactions are considered in determining the shareholder’s basis in both stock and loans. The Code also allows the shareholder to elect to do this calculation in a slightly different order. The default order follows.
Tier 1. Basis is increased by all capital contributions made to the corporation and all income (including taxexempt income) reported on Schedule K-1.
Tier 2. Basis is decreased by property distributions (including cash) made by the corporation. (This does not include dividend distributions reported on Form 1099-DIV, Dividends and Distributions.
Tier 3. Basis is decreased by nondeductible expenses (i.e., 50% of meals and entertainment expenses). It cannot be carried forward)
Tier 4. Basis is decreased by all deductible losses and expenses that are individually stated on Schedule K-1 (i.e., charitable contributions and IRC §179 expenses).

Optional Ordering Election
Every shareholder has the option to elect to decrease basis first by deductible losses and then by nondeductible expenses. This election applies to both stock basis and loan basis. To make the election, the taxpayer must attach a statement to their timely filed original or amended return that:
1. Identifies the corporation,
2. States that the taxpayer is making the special ordering election under Treas. Reg. §1.1367-1(g), and
3. Agrees to the carryover rules under the regulation.

Information about the Partnership

Shareholder's name SSN
Corporation 's name EIN
Tax year ending Ownership at the beginning of yr at the end of yr

Stock Basis & Debt Basis

Stock Basis
1 Stock basis at beginning of the year (not less than zero). 1
2 Additional captial contribution of stock purchased. 2
3 Increase for income and gain here.
3a Ordingary income. Sch K-1, line 1 3a
3b Real estate rental income. Sch K-1, line 2 3a
3c Other rental income. Sch K-1, line 3c 3c
3d Interest, dividends and royalites. Sch K-1, line 4,5 & 6 3d
3e Ordinary dividends. Sch K-1, line 4,5 & 6 3e
3f Royalites. Sch K-1, line 4,5 & 6 3d
3g Net capital gain. Sch K-1, line 7 & 8a 3g
3h Net section 1231. Sch K-1, line 7 & 8a 3h
3i Other income. Sch K-1, line 10 3i
3j Excess depletion adjustment. Sch K-1, line 10 3j
3k Tax exempt income. Sch K-1, line 16 Code A 3k
3l Recapture of business credits. Sch K-1, line 10 3l
3m Gain from 179 asset disposition. Sch K-1, line 10 3k
3n Other items that increase stock basis. Sch K-1, line 10 3n
4 Total income and gain items.
5 Stock basis before distributions. Add lines 1, 2 and 4. 5
6a Reduction for nontaxable distributions. Sch K-1, line 16 Code D. 6a
6b Capital Gain on distributions excess stock basis. Sch K-1, line 16d. 6b
7 Stock basis before nondeductible exp and depletion. (cannot be negative) 7
8a Non-deductible expenses. Sch K-1, line 16 Code C 8a
8b Depletion for oil and gas. Sch K-1, line 16c & 13 8b
8c Business credits (sections 50(c)(1) and (5)). Sch K-1, line 16c & 13 8c
9a Total Nondeductible expenses(ADD line 8a-8c). 9a
9b Allowable nondeductible expenses based on stock basis. 9b
9c Allowable nondeductible expenses based on debt basis. 9c
9d Unallowable nondeductible expenses over stock and debt basis. 9d
10 Stock basis before loss and deduction items. 10
11a Allowable loss and deduction items based on stock basis. Enter the amount from line 47, column (c) 11a
11b Allowable Deductible loss and deduction on debt stock basis. 11b
11c Undeductible loss and deduction items over debt basis. (carry forward) 11c
12a Net increase for debt restoration. (see net increase in instructions for line 23 12
12b Debt basis restoration. (see net increase in instructions for line 23 12b
13 Other items that decrease stock basis. 13
14 Add lines 11, 12, and 13. 14
15 Stock basis at the end of the corporation’s tax year. 15
Part II Shareholder Debt Basis
Debt 1 Debt 2 Debt 3 Total
Section A-Amount of Debt
16 Loan balance at the beginning of the tax year.(It is different from basis which is equal to + advances-repayment) 16
17 Additonal loan. 17
18 Loan balance before repayment.(add lines 16 and 17) 18
19 Principal portion of debt repayment (Not include interest). 19
20 Loan balance at the end of the tax year. 20
Section B-Adjstment to Debt Basis
21 Debt basis at the beginning of the tax year. 21
22 Enter the amount, if any from line 17. 22
23a Reduction in debt(subtract line 16 by line 21). 23a
23b Net increase for restoration(see instruction). 23b
24 Debt basis before repayment(Combine 21,22,and 23). 24
25 Divide line 24 by line 18. 25
26 Nontaxable deb repayment.(multiply line 25 by line 29). 26
27 Debt basis before nondeductible expenses and losses. Subtract line 26 from line 24. 27
28 Nondeductible expenses and oil and gas depletion deductions in excess of stock basis. 28
29 Debt basis before losses and deductions. Subtract line 28 from line 27. If the result is zero or less, enter -0-. 29
30 Allowable losses in excess of stock basis. Enter the amount from line 47, column (d). 30
31 Debt basis at the end of the corporation’s tax year. Subtract line 30 from line 29. If the result is zero or less, enter -0-. 31
Section C-Gain on loan repayment
32 Repayment(Enter the amount from line 19). 32
33 Nontaxable repayment (enter the amount from line 26). 33
34 Reportable gain (subtract line 33 from line 32). 34
Part III Allowable loss and deduction items
(a) current year losses and deductions (b) Carryover amount (column (e) from the prior year) (c) Allowable loss from stock basis (d) Allowable loss from debt basis (e) Carryover amounts
35 Ordinary business loss. 35
36 Net rental real estate loss. 36
37 Other net rental loss. 37
38 Net capital loss (both short and long). 38
39 Net section 1231 loss. 39
40 Other loss. 40
41 Section 179 deductions. 41
42 Charitable contributions(Sch K-1, line 12, Code A). 42
43 Investment interest expense. 43
44 Section 59(e)(2) expenditures. 44
45 Other deductions. 45
46 Foreign tax paid accrued. 46
47 Total loss.Combine lines 1-12 for each column. Enter the total loss in column (d) on line 15 of part II. 47