Thank you! That IRS guide is very helpful. However, I'm confused about one item. The guide clearly states that "separately stated income items" from boxes 2-10 will increase a shareholder's stock basis. My first K-1 from my S-Corp lists "interest income" on line 4. According to the IRS document I would think I should add that amount to my stock basis. But the K-1 also lists the only items that affect shareholder basis as my lines 16c and 16d. The interest is listed at the bottom as "other information" line 17a. It seems to me that the IRS instructions regarding shareholder basis for lines 2-10 contradict what TurboTax actually prints for line 17a.
Any advice? Do you know if I should add interest to stock basis or not?
To confuse me even more, box 1 "ordinary business income" passes through to my personal taxes, but it is included in the stock basis. Box 4 "interest income" also passes through to my personal taxes. I pay full taxes on both box 1 and box 4, but why would box 4 be treated differently than box 1 for basis? Please help.
