A couple of follow-up comments:
- A 1099-DIV is only used for liquidating distributions as noted by @Anonymous_
- When adjusting your stock basis, a shareholder needs to determine whether the overall adjustment to basis is a net positive or net negative before determining the sequence of basis adjustments. It is possible for distributions to reduce basis first and have ordinary losses carried over. Just depends on what the net adjustment is.
- Bullet number 2 is important to understand when completing form 7203.
- If you aren’t clear on how S corps work, I recommend meeting with a tax professional. There can be many traps for the unwary.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
