Sorry I don't understand. Could you explain?
You say: It will increase by income items and decrease by expenses items and distributions.
What does It refer to? Is it my personal tax return? As I have already mentioned the S-Corp will file its own taxes separate from my personal tax return.
>Since you are buying stock, your outside basis may be different than the inside basis.
What is outside basis vs. inside basis?
>There is no Section 754 step-up when dealing with an S-corp. So if you paid $100,000 and the S-corp that has an inside tax basis of $60,000, the extra $40,000 goes nowhere until you sell or it goes out of business.
??
