How do i determine an adjusted basis?

I invested about $40,000 over the last few years for stock in an S-Corp that was developing new video broadcast technologies. The S-Corp ran out of funding during 2020 and I subsequently lost all that I invested-- I knew the risks, so I understand I am just S.O.L. I only got K1's from the few years that I was a stockholder. Is the only information relevant for me what is contained in the K1's and therefore there is no adjusted basis that applies to me?

Regards,

Williamdor

190

Expert Alumni

Mar 25, 2021 1:43:32 PM

The Schedule K-1 reports your share of income (loss) in the S-Corp. These Schedule K-1 have to be reported each year on your tax return.

To determine your cost basis when the S-corp failed in 2020, you need to calculate your stock basis from the numbers reported on your Schedules K-1.

Please read this IRS document which details how you calculate your stock basis to determine your disposal loss.

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How do i determine an adjusted basis?