A shareholder’s initial basis in the stock is likely the cost of the stock when the shareholder acquired it.
If your SubS started business in 2023, on IRS form 7203, the Stock basis at the beginning of the corporation's tax year would be $0 and you would report the amount of Basis from any capital contributions made or additional stock acquired during the tax year.
If your SubS started business prior to 2023, on IRS form 7203, the Stock basis at the beginning of the corporation's tax year would carryforward from the 2022 IRS form 7203, line 15.
IRS form 7203 replaces a three-part worksheet for figuring a shareholder’s stock and debt basis that used to be found in the Shareholder’s Instructions for Schedule K-1 (Form 1120-S). The IRS introduced Form 7203 in 2021.