What if I don't know my stock basis?

Shareholders need to keep track of their stock basis in an S corporation, which changes each year you're a shareholder.

If you don't know what your basis is, or you haven't been tracking this, you'll need to review your prior year returns and initial investment information to determine your basis.

For very simple S corporations, your basis is:

1. Your initial investment
2. Add your share of income each year
3. Subtract your share of losses each year
4. Subtract any distributions you received from the S corporation each year

For more information about determining your basis, see the Form 7203 Instructions .