1120-S Tax Return

[nhkyn]

Hi,

This is regarding Balance sheet and form 7203.

Our LLC S-Corp has incurred a loss of about 13000 K in year 2025. We are 2 shareholders with 50% share of each of us.

We have made a capital contribution of total 4000 K in year 2025.

Last year (2024) we had a total  profit of 4000 K.

In calculating how much each of us can claim this year's loss in our personal federal tax  return  Turbotax calculated like this:

Stock basis: 2000 K

Capital contribution : 2000K

Total Stock basis: 4000K

Part III Shareholder Allowable Loss and Deduction Items:  

Ordinary business loss: 6500 K

Allowable loss from stock basis and Capital contribution : 4000 K

Each of us can claim 4000K with carry over of 2500K to claim in next year.

In the balance sheet of  Liability and Equity section of 2025 Tax Return of the S-corp the balance at the beginning is 500000 K and end 504000K.  

In this case what number should be in the beginning Capital contribution in the balance sheet of 2026 1120-S Return?

I appreciate the response.

Thank you.

Nurul Islam, MD

[Mike9241 · Accepted solution]

calculating your basis starts with the first year it was an S-corp. ypu can doenload the 7203 from the iRS website and complete it for each year. 

https://www.irs.gov/pub/irs-pdf/f7203.pdf 

then for each year for each shareholder (llc member) capital contributed + profit or - loss - distributions = STOCK  basis at the end of the year, which is your STOCK basis at the start of the following year.

If you personally made loans to the S-corp and had losses in a year that exceeded your stock basis, your basis in the loan(s) is reduced but not below zero. Repayments of reduced basis loans will result in taxable income. You may need the help of a tax pro