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Partner and Shareholder Tax Issues


If you are a partner in a partnership, a member in a multi member limited liability company treated as either a partnership or an S Corporation, or a shareholder in an S Corporation, each year, you will need to track the following items as they pertain to your ownership in the business:

1-Capital Contributions: This is cash and or adjusted basis property you contribute to the business. (NOTE this is not revenue to the business)

2-Distributions: These are cash or property distributions the business makes to you. (NOTE this is not an expense of the business)

These items, along with other items, will impact your "owner basis/adjusted basis in the entity" each year which you and or the business should keep a record of.

Each partner and each shareholder will want to keep an annual record of their "tax basis in the entity".

An "owner's tax basis in the entity" provides the information needed to determine the following:

1-The DEDUCTIBLE loss the owner may take each year, when the entity allocates a loss to the owner.

2-The potential TAXABLE capital gain if excess distributions are taken by the partner or shareholder.

3-The gain or loss upon the sale of the ownership interest by the partner or shareholder.

CALL NOW 561-746-1926 or 561-339-8102 if you have any questions or concerns or would like to schedule a FREE, Confidential, No-Obligation Tax-Saving Consultation.