How to Properly Identify Actual Distributions Have you ever spread a business tax return for an S corporation and noticed that the Form 1120-S reported multiple different distribution amounts? This may result in an out-of-balance retained earnings reconciliation within your analysis. It’s imperative that you use the correct value of actual distributions in your analysis. …
Every year the IRS issues new regulations and publishes new tax forms. There is one new form, Form 7203, that you may start seeing with your borrower’s most recent individual income tax returns. This form can be extremely helpful for your cash flow analysis of S corporation shareholders. What is Form 7203? If you have…
We frequently receive questions on the Bukers Hotline about spreading and properly analyzing K-1s received by individual borrowers, including this most recent question about an “Other Increase” that deserves to be highlighted. A recent caller was analyzing a borrower’s K-1 from an S-corporation and the caller found a shareholder’s basis worksheet attached to the K-1….
We have received many great questions on the Bukers Hotline recently, including a question about a Shareholder’s Basis Worksheet that a lender received with her borrower’s S-corporation K-1. If you have a borrower who is a shareholder in an S-corporation, you are now more likely to find a shareholder’s basis calculation included with either your…