The basis in your S-Corp is based on your investment into it.
In the first year of operation you maybe put in some money to help pay bills as you got started. That's your initial investment.
Then each year your basis goes up with the amount that the business makes as a profit and down by the amount that you take out in cash.
So, if you take out the exact amount of the profit each year and never made an initial investment then your basis is zero.
@sjlocke
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