New Form 7203 Filing

Forum|Forum|4 years ago
April 7, 2022
1 reply
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I have a 2 part question on the new Form 7203 S Corp Shareholder Stock Basis.

1 - Received 2 shares of S Corp as a gift. Received Schedule K1 Form 1120S. TT says I need to file form 7203 for non dividend distributions in Box 16D. This is the 1st year filing and I have nothing that shows the stock basis for these shares at beginning of the year. Would I enter zero or where could I find the stock basis? What would happen if I enter zero due to no actual data?

2 - I can see form 7203 under the K1 form for the S Corp and open it to review or type into. But when I generate the PDF forms to review, file and save, the 7203 is not included. Does that mean it will not be efiled when I efile my return, or is it just missing from the PDF lists? I do not see any instructions if it will be included or excluded or what to do with the form to submit to the IRS. I have taken the latest updates to TT.

Appreciate any input, thanks in advance.

Best answer by PatriciaV

1. Basis of a Gift

To figure the basis of property you receive as a gift, you must know (a) its adjusted basis to the donor just before it was given to you, (b) its FMV at the time it was given to you, and (c) any gift tax paid on it.

If you don't know or are unable to obtain the donor's basis at the time of the gift, use the Fair Market Value (FMV).

You can research the historical value (FMV) of any publicly traded stock using the internet. Yahoo Finance has historical stock look-up available.

If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. Increase your basis by all or part of any gift tax paid, depending on the date of the gift. (Only the donor would have information on gift tax.)

For examples and more information, see IRS Pub 551 - Basis of Assets - Property Received as a Gift

2. If Form 7203 has no entries other than the header information, the form will not be included with your return. Once you have entered more information, the form should print with other required forms.