S corporation shareholders confront limitations in the amount of passthrough entity losses they may deduct from income. Understanding how basis is accurately calculated and what qualifies as shareholder basis against which to deduct passthrough losses is integral to preparing an accurate tax return that will pass the scrutiny of an IRS audit.
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AICPA The Tax Adviser, by Amy I. Kinkaid, CPA, J.D., and Charles E. Federanich, CPA
