S Corporation

Shareholder Basis in S Corp Stock:

Initial basis
+ Income items (separately & non-separately stated items - includes tax free income)
+ Additional shareholder investments in corp. stock
- Distribution to shareholders
- Loss or expense items
= Ending basis

Casualty and Theft Losses (Individual)

10% AGI Test

Smaller loss basis (lost cost or decreased FMV)

<Insurance Recovery>

Taxpayer's Loss

<$100> (IRS Tax)

Eligible Loss

<10% AGI>

Deductible Loss

Typically the smallest # in choices because:

• Insurance recovery usually eliminates the majority of the loss basis
• 10% AGI will also wipe out the majority of the loss #

Itemized Deductions

Schedule A

Charity: 50% AGI forward 5 years
Other misc: 100% gambling
Misc. expense: 2% [Business expenses, investment cost, tax prep/attorney]
Medical (not cosmetic): 10% AGI (65 yrs old + 7.5%); must exceed AGI %
Interest paid
Taxes: state
Theft/casualty: 10% AGI less $100

Items that will not phase out 
Gambling loss
Investment costs
Medical
Theft/Casualty

Exceptions to IRA Penalty Tax

Generally, premature IRA distribution is subject to a 10% penalty tax, EXCEPT if:

• Home Buyer 1st time $10K max 
• Insurance Medical
• Medical expenses > 10% of AGI (OR 7.5% if 65 years old+)
• Disability
• Education
• And
• Death

HIM DEAD

Individual Taxation

Gross Income
<Adjustments>
AGI
<Standard OR Itemized Deductions>
<Exemptions>
Taxable Income

Federal Income Tax
<Tax Credits>
+ Other Taxes
<Payments>
Tax Due OR Refund