Why do I need to include basis information with my return?

Shareholders in an S corporation each have a basis in the S corporation. Depending on what your basis is, you may be limited in the losses, credits, or deductions you're allowed to claim. Tracking and reporting your basis helps the IRS verify you're allowed to claim certain losses, credits, or deductions.

This is a recent requirement and only applies to certain shareholders.

For more information on this requirement, see the Form 7203 Instructions .