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Worksheet Instructions for

assets, see section 357(c). See

of your return. See specific

section 358 for more information on

instructions for

Income

(Loss), later.

Figuring a Shareholder’s Stock

the basis of stock received in a

and Debt Basis

Line 6. Enter the distributions

section 351 transaction.

reported on Schedule K-1, box 16,

Don’t use this worksheet if you

The basis of inherited property is

code D. Don’t include any Form

have made an election under

generally the fair market value at the

1099-DIV distributions on this line.

Regulations section

date of death or the alternate

CAUTION

1.1367-1(g).

Note. If the amount of the distribution

valuation date.

is more than the stock basis before

The basis of stock acquired by gift

distributions, report the excess

Part I. Shareholder Stock Basis

is generally the basis of the stock in

amount as a capital gain on Form

the hands of the donor. There are

8949 and Schedule D. Don’t increase

This worksheet addresses

special rules if the fair market value of

your stock basis for the amount of

adjustments to stock basis as

the stock is less than the donor’s

capital gain reported for the excess.

provided under section 1367.

adjusted basis. See Regulations

CAUTION

See Nondividend distributions in the

Other code sections might also cause

section 1.1015-1.

Instructions for Form 8949.

a reduction in S corporation stock

The basis for stock received as

basis. For example, certain credits

Line 8a. Enter the amount from

compensation is the fair market value

require the reduction of both an S

Schedule K-1, box 16, code C.

on the date the compensation is

corporation’s assets as well as the

included in income. See Pub. 551 for

Line 8b. Enter the amount of oil and

shareholder’s stock basis. See

details.

gas depletion claimed on your

sections 50(c)(1) and (5) for details.

personal return up to your

Line 3. Enter on lines 3a through 3m

proportionate share of basis in the

Line 1. Enter your basis in the stock

all separately figured and

property subject to depletion. Any

of the S corporation at the beginning

non-separately figured items of

cumulative depletion in excess of your

of the corporation’s tax year. Unless

income from the Schedule K-1. See

proportionate share of basis in the

this is your initial year owning stock in

below for special instructions.

property subject to depletion won’t

the S corporation, this amount should

Reminder. Enter only positive

reduce your basis.

be the same as your ending stock

amounts from the Schedule K-1 on

basis from the prior tax year.

Don’t enter an amount for depletion

line 3. Negative amounts (decreases

not related to oil and gas property.

Stock basis can’t be less than zero.

to stock basis) are entered on Part III.

Don’t include any basis from

Line 11. Use Part III to figure the total

Line 3j. Enter the amount by which

indebtedness on this line. Stock basis

allowable loss and deduction items

your cumulative depletion deduction

and debt basis must be figured

from stock basis. Enter the total from

exceeds your proportionate share of

separately. Debt basis is addressed in

Part III, line 13, column (c). This

basis in the property subject to

Part II of this worksheet.

amount can’t exceed line 10.

depletion. See information reported in

Line 2. Enter any additional

Line 12. Use Part II to figure the debt

Schedule K-1, box 15, using code C.

contributions to the capital of the

basis restoration, if any. Enter the total

For oil and gas depletion, don’t

S corporation or any additional

from Part II, line 8.

enter an amount. See the instructions

acquisitions of stock. Don’t include

for line 8b for the decrease to basis.

Line 13. Enter any other decreases

any loans to the S corporation.

to stock basis not accounted for on

Line 3k. Enter the sum of the

The basis of stock you purchased

the lines above. This includes the

amounts from Schedule K-1, box 16,

is usually its cost.

reduction to basis for the sale or

codes A and B.

redemption of part of your stock.

If you contributed property to the

Basis isn’t increased by

S corporation in exchange for stock in

If a portion of your stock is

excluded discharge of

a section 351 transaction, your stock

redeemed, sold, or otherwise

TIP

indebtedness income of the

basis is generally figured by taking the

disposed of during the year,

CAUTION

S corporation under sections 108(a)

carryover basis of assets transferred

attach two separate worksheets. The

and 108(d)(7)(A).

to the corporation, less the liabilities

first to figure your stock basis at the

assumed by the corporation. If the

The income reported on line 3 should

date of sale and the second to figure

assumed liabilities exceed the

be reported on the appropriate areas

your stock and debt basis at year end.

adjusted tax basis of the contributed

-3-

Instructions for Schedule K-1 (Form 1120S) (2017)

Instructions For Schedule K-1 (Form 1120s) - Shareholder'S Share Of Income, Deductions, Credits, Etc. - 2017 Page 3

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