I have a question. My son has a business that started in 2021 as a SM LLC. In 2024, he converted to an S-Corp for tax purposes (he is the sole owner still). My question is: how do I calculate the starting basis for him for 2024? He has made money each of the 3 years and has no debt. He also started his business with some personal equipment that is still in use. Does the basis start at $0 in 2024? or do I account for what he contributed and made in the previous 3 years? thank you.
If S corp takes a Section 179 deduction and passes thru to owner, this 179 deduction will reduce owner basis, so if the asset is sold later would the recapture gain then increase the owner basis? Seems like it should as basis was reduced by the 179 deduction?
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I have a question. My son has a business that started in 2021 as a SM LLC. In 2024, he converted to an S-Corp for tax purposes (he is the sole owner still). My question is: how do I calculate the starting basis for him for 2024? He has made money each of the 3 years and has no debt. He also started his business with some personal equipment that is still in use. Does the basis start at $0 in 2024? or do I account for what he contributed and made in the previous 3 years? thank you.
I have a similar situation. Did you ever get this questioned answered?
@@SandraLongoriaI did not. The best answer I could find was when I asked ChatGPT 😎
Need to create an excel schedule for this. Build the ordering rules into the calc.
Did you make one or find one?
@@whoisdesirtv nope lol.
If S corp takes a Section 179 deduction and passes thru to owner, this 179 deduction will reduce owner basis, so if the asset is sold later would the recapture gain then increase the owner basis? Seems like it should as basis was reduced by the 179 deduction?
I believe it would be reported on the shareholders’ K-1s in Box 17, which of course increases basis.