Your Stock Went to Zero: How the Worthless-Securities Deduction Works
Stock that became totally worthless is deemed sold Dec. 31 under IRS Section 165(g) — report $0 proceeds on Form 8949 and amend up to 7 years back.
#stock-basis
Stock Basis
Track stock cost basis for accurate investment accounting
Lending Money to Your Own S Corporation: How Stock Basis, Debt Basis, and Loan Paperwork Decide Whether Your Losses Are Deductible
An S corporation K-1 loss is deductible only up to your stock basis plus debt basis, and a personal guarantee of a corporate bank loan creates zero debt basis. This guide covers the two basis buckets, the $25,000 open-account-debt threshold, the repayment gain trap, and the documentation that keeps a shareholder advance from being reclassified as equity.
Un-Electing S Corporation Status: How to Revoke Your S Election and What It Costs
Revoking an S election takes a signed statement from shareholders holding more than 50% of shares, received by March 15 for a January 1 effective date, and it bars re-election for five tax years. This guide covers the required statement contents, mid-year short-year splits, the Section 1374 built-in gains tax on appreciated assets, and the post-termination window for tax-free AAA distributions.
The S Corporation AAA: How the Accumulated Adjustments Account Decides Whether Your Distributions Come Out Tax-Free
An S corporation distribution is tax-free only to the extent of the Accumulated Adjustments Account once the company carries C-corporation earnings and profits. This guide covers what moves AAA up and down, the four-step distribution ordering rules, a worked $40,000 example with two opposite outcomes, and five bookkeeping mistakes that turn owner draws into taxable dividends.
Form 1099-DIV Box 3: The Return-of-Capital Basis Trap for REIT, BDC, and MLP Investors
A practical walkthrough of Form 1099-DIV Box 3 nondividend distributions — how return-of-capital payments from REITs, BDCs, MLPs, and managed-distribution funds reduce your cost basis under IRC Section 301(c)(2), convert into immediate capital gain under 301(c)(3) once basis hits zero, and what records you need to keep so the IRS matching program never catches you short.
Section 1059 Extraordinary Dividend Basis Reduction: The Corporate Shareholder Trap That Turns Tax-Free Dividends Into Immediate Capital Gain
Section 1059 reduces a corporate shareholder's stock basis by the nontaxed portion of an extraordinary dividend — 5% threshold for preferred, 10% for common — when received within two years of acquisition, with excess immediately taxed as capital gain. This guide covers the thresholds, the 85-day and 365-day aggregation rules, the FMV election, the non-pro-rata redemption exceptions, and the lot-level bookkeeping that keeps corporate finance teams out of audit trouble.
Form 1099-B Cost Basis: Reconciling Covered and Noncovered Securities on Form 8949
Brokers often report a wrong or zero cost basis on Form 1099-B, especially for RSUs and ESPP shares. This guide explains covered vs. noncovered securities, Box 1e and Box 5, and how Form 8949 adjustment code B corrects basis so you do not pay tax twice on the same income.
Form 1099-B Cost Basis Reconciliation: How to Avoid Paying Tax Twice on the Same Dollar
Form 1099-B Box 1e shows your broker's cost basis, but Box 5 determines whether the IRS sees it. A working guide to covered vs. noncovered securities, Form 8949 adjustment codes (B, W, Q, O, T), and the RSU/ESPP basis corrections that prevent double-taxation.
MLP K-1 Tax Issues for Individual Investors: UBTI, Section 751 Recapture, and Multi-State Filings
A Master Limited Partnership pays cash quarterly but issues a Schedule K-1, not a 1099. Most distributions reduce your cost basis instead of being taxed, holding units in an IRA can trigger UBTI and a Form 990-T once income exceeds $1,000, and selling converts depreciation into ordinary income under Section 751 — taxed up to 37%.
How the OBBBA's Tiered QSBS Exclusion Changes the Math for Founders, Employees, and Angels
The OBBBA raised the Section 1202 QSBS cap to $15 million, lifted the gross-asset ceiling to $75 million, and replaced the five-year cliff with a tiered 50/75/100 percent exclusion at three, four, and five years — but only for stock issued after July 4, 2025.
Section 1377(a)(2) Closing-of-Books Election: How S Corporations Allocate Pass-Through Income When a Shareholder Leaves Midyear
Learn how a 1377(a)(2) election lets an S corp split its tax year when a shareholder leaves midyear, allocating pass-through income fairly.
The 30-Day Decision That Can Save Founders Millions: A Plain-English Guide to the Section 83(b) Election
A Section 83(b) election lets founders and early employees pay ordinary income tax today on the full value of restricted stock instead of at each vest. Filed within 30 days on IRS Form 15620, it can convert millions of phantom ordinary income into long-term capital gain and start the QSBS holding clock on day one.