r/taxpros•
sigmafs

S Corp with Insufficient Basis

FIRM: Procedures

First experience with this circumstance. Client was advised to form a S-Corp when purchasing an existing dental practice. Client, 100% shareholder, received 100% ($425k) financing plus $120k working capital. Client paid themselves W2 and issued distributions. Client does not have sufficient basis to avoid taxable distributions. Any suggestions to mitigate taxable event?

Posted Apr 6, 2026, 1:27 PM UTC · locked

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