Stock Basis Form 7203

Technical topics regarding tax preparation.
#1
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So we finally have a form for this. Hopefully this will help in the coming years when we get new clients as far as trying to determine what their basis is.
https://www.irs.gov/pub/irs-dft/f7203--dft.pdf
 

#2
HowardS  
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Years ago I ranted on TaxAlmanac about not being able to get basis information from previous preparers and said at the time that this problem would not go away until basis becomes part of the tax return.

I am very pleased. It doesn't help retrieve lost basis info but like the changes to covered securities, we should all benefit going forward.
Retired, no salvage value.
 

#3
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HowardS, I agree!
 

#4
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So this is a standard form to be filed that replaces the current tax basis attachment requirement? It appears this form is, again, only filed under certain conditions.

"Form 7203 is filed by S corporation shareholders who:

Are claiming a deduction for their share of an aggregate loss from an S corporation (including an aggregate loss not allowed last year because of basis limitations)
Received a non-dividend distribution from an S corporation
Disposed of stock in an S corporation (whether or not gain is recognized)
Received a loan repayment from an S corporation"
 

#5
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I think this will soon be a required form each year. I sure hope so!
 

#6
Jake  
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One of my regrets in life is ever reinvesting dividends - at least before the payers were required to keep records of basis. I never intended to sell any of those stocks counting on the DOD step up in basis, but then encountered a few buyouts where I had to calculate my gain. It gets worse with spinoffs. For some of those stocks I just donated to a donor advised charitable fund before the acquisition closed. A few I just did my best and prayed IRS would never ask.
 

#7
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Does this impact 2021 S Corporation Returns?
 

#8
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It impacts 2021 1040 (and 1041) returns where the individual taxpayer was a shareholder in an S corporation that had any negative adjustments to basis.

So no, it doesn't actually impact the S corporation returns themselves.
 

#9
WBR  
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Can form 7203 be attached to an e-filed return or does it need to be paper filed?

Does not look like Lacerte is going to have this form any time soon.
 

#10
irc162  
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If you use Drake and are looking for Form 7203, if you filled in basis info on the k-1 imput sheets, Form 7203 will appear in print mode under miscellaneous. It's not under Federal forms (where you might expect to see it). I just spent way too much time trying to figure out why this form wasn't appearing as a Federal form on my return.
 

#11
AlexCPA  
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The latest (https://proconnect.intuit.com/community ... i-p/192872):

Lacerte is committed to ensuring that our program conforms to all filing requirements related to Form 7203.

This form is currently in development.

We currently recommend holding returns for which Form 7203 is required. We will provide further details on filing guidance and form release timing no later than Tuesday, February 8th.


Hopefully this will put an end to the rioting and looting and bring peace back to our beloved community. :lol:
Even more of my antics may be found on YouTube:
https://www.youtube.com/channel/UCXDitB ... sMwfO19h7A
 

#12
WBR  
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ALEXCPA - Thanks for the update. Maybe they will have it ready by April 18th.
 

#13
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irc162 wrote:If you use Drake and are looking for Form 7203, if you filled in basis info on the k-1 imput sheets, Form 7203 will appear in print mode under miscellaneous. It's not under Federal forms (where you might expect to see it). I just spent way too much time trying to figure out why this form wasn't appearing as a Federal form on my return.

You can change the form order. Right-click on the form name, then click Setup, then click Form Order or click Allow Drag/Drop Form Ordering. If you move it up to where the Federal forms are, then it will be in the Federal section instead of Miscellaneous.
 

#14
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On Form 7203, there is a box at the top called "Stock Block". It's used if the shareholder acquired shares in different blocks.

If the shareholder acquired all shares in one block, what are you putting in the "Stock Block" line on the 7203? Leaving it blank? The instructions don't speak to that on Page 2.

https://www.irs.gov/pub/irs-pdf/i7203.pdf
 

#15
WBR  
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