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I have a shortcut to Alice Cooper's Hey Stoopid on my desktop and I hold the receiver up to my speakers and crank up the volume.

Dear Abby (and friends), I appreciate your comment and would indeed write more (I do enjoy it very much), but it seems to me that a steady diet of crackerbarrel humor and southern cornbread tends to become a tad overdone and stale PDQ (as you know, some tax pros want non-tax posts eliminated entirely). I'll continue to contribute occasionally though. We certainly could USE some humor nowadays, couldn't we? Saw that divorces are up sharply among newlyweds (must not have suffered from as many slings and arrows of past events as this old bunch - I'm trudging through a fifty-something anniversary). Some good news: supposed to have a vaccine in a few months which is cheering. Wonder of wonders - saw Lysol spray for sale on Amazon (if you want to pay $64.99 for three cans); the stuff's made in India. While my Prozac-popping pal looked a little bleary-eyed the other day, at least she's still with us, so that's encouraging. Also recently saw two movies on Netflix that weren't completly crazy. Hooray! Best regards, BB

Probably just us dinosaurs.

Outside of us dinosaurs, I wonder who still knows (or gets taught) that if the out-of-balance amount is divisible by 9 that somewhere two numbers are transposed in the different columns?

If we get a call from an unrecognized number (or just a town name), instead of saying anything, I start humming into the phone. Scotland the Brave is a good one, but you could use the Eggplant That Ate Chicago, or Clementine, or Hallelujah Chorus, or whatever. If it's a person, they'll SAY something. If it's a robo-call, it clicks off. SO much easier on the throat than growling, and makes the others in the office laugh instead of grumble.

Max, it looks to me like you could be dealing with a sale of the warehouse by the S-Corp; instead of a sale of the S-Corp stock. If it was a sale of the stock, then I don't see why the final K-1 would show the sale of real estate. If it was a sale of real estate by the S-corp, then you need to compute gain or loss on the liquidation of the S-corp.

I did not suggest that there would be. The S corp shareholder's basis in his shares starts with his or her initial investment, and each year it will change for the items on the K-1. It increases because of the income that flows to the shareholder, and it decreases for things like nondeductible expenses and distributions. There is a specific order that is followed for each year's increases and decreases. Below is a pdf worksheet for calculating a shareholder's S corp basis. It is somewhat general, so please keep in mind that the gains reported on the K-1 will go on this worksheet on one of the blank lines for other income. There is also a line for the distributions lower down in the bottom section. Most tax programs will automatically create this basis worksheet for us if we ask it to. It's too bad that the preparer of the S corp return didn't provide this to your client. In your case, the first year would start with -0- basis from the previous year and then add the $94K contributed, then the items from each line of the K-1. You will need to complete a basis worksheet for each year the shareholder was in the S corp, starting with the first year, and the ending basis of each year carries over to become the starting point for each subsequent year's calculation. Also below is an article from the Journal of Accountancy that discusses the basics of calculating basis in an S corp. It's from 2012 but the concepts remain the same. S_Corporation_Shareholders_Adjusted_Basis_Worksheet.pdf https://www.journalofaccountancy.com/issues/2012/jan/20114319.html

Maybe I should be more clear. There should have been some initial investment this person made in exchange for his shares in the S corp that would be his initial basis that is adjusted each year for his share of the S corp activity on the K-1. Don't forget to account for any nontaxable income, nondeductible expenses, as well as the distributions he received each year when calculating his basis.

The answer still may, or may not, be 'no' unless the client put nothing, no cash or no property, into the S Corp at acquistion of his shares. You need to know the initial investment and then you will be able to use the activity and disrtributions on all of the K-1s to reconstruct the basis.

I get plenty of those, too. It is almost always a robocall, but sometime it is a potential new client that I wouldn't want to miss. So, instead of answering, "Hello", or "Yes", which the robot recognizes, I say, "Good morning. How can I help you". If it is a live person needing tax services, they will ask an appropriate question. If it is a robot, it will wait for 3 seconds and disconnect. Then I block that number. Of course that doesn't always work as the robocallers will switch to another number, but at least it stops the less sophisticated ones, like those asking for a donation or to answer a survey.

You should enter the unrecaptured gain and box 9 1231 gain as they appear on the K-1 with no additional adjustment necessary. Box 16, code D indicates that is the amount of distributions paid to the shareholder during the year that reduce the shareholder's basis.