Scorp shareholders tax basis has become a hot topic due to the new TCJA requirement. I am seeing a few threads on this topic in the forum already.

Helping the clients to determine the tax basis is going to be a headache. I suppose we will need their prior year tax returns, etc.

A quick question same to my mind. Lets say a shareholder had already taken back all his initial contribution in prior years and therefore his basis had become '0' at the beginning of 2018. Then in 2018, his share of the ordinary income from the Scorp is $1,000. If he did not take any distribution in 2018 and also did not make any contribution, his tax basis would be $1,000. In this case, we do not need to go back to all his prior year tax returns to make the determination. Is my thinking correct?

Is this a common situation? Or is it unusual? In other words, is it unusual for a shareholder's basis be '0' at the beginning of a tax year?