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QUESTION DETAIL
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In 2008, I sold my shares of an S corp to my partner. I realize that my tax basis is generally what I paid for the shares initially, which brings me to my question. I was one of the original shareholders when the company started. I personally guaranteed the loans required to start the business. Would my basis be defined as the amount borrowed to start the company?
ANSWER
Expert Wray Rives's Answer:
The corporate debt is only considered part of your basis when calculating S-Corp losses that my flow through to you on a K1, it is not considered basis in calculating gain or loss from selling your share of the S-Corp.
