Here are my comments:
- When your parents gifted you the stock, their stock basis in those shares gifted carry over to you at that time.
- Not clear on how you went from 10% to 13%, but if that increase was the result of a gift, then once again you get a carry over basis.
- In the meantime, you should have been tracking your tax basis in your S corp stock; begins with the gift, is then adjusted annually for the applicable lines on the K-1, and adjusted once again for the 3% increase.
- Your parent's basis at the time of the gift(s) does not come from the balance sheet. It comes from their tax basis schedule they should have been maintaining.
- The change from 130 shares to 100 shares sounds like a recapitalization, with only limited facts. In this case, your basis in the 130 shares would carry over to the newly issued 100 shares.
- Going forward, you should have been updating your tax basis annually as noted above. This figure is now your cost basis.
- I might recommend a tax professional help you in this instance, but that individual will need all the information noted above to provide guidance.
- And lastly, no facts on the eventual redemption of stock. The rules of family attribution could very well come into play so you need to make sure this is discussed with the tax professional.
*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.
