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You don't show a drop in market value. You only show a drop when they actually sell the stuff.
You might want to read this article:
https://www.investopedia.com/ask/answers/04/021204.asp
Totally get that. But if I'm showing a book basis balance sheet for the S Corp, does the value of their investment account at 12.31.20 need to tie to their statement or should it just reflect the original investment plus cap gains according to the 1099 they received?
Totally get that. But if I'm showing a book basis balance sheet for the S Corp, does the value of their investment account at 12.31.20 need to tie to their statement or should it just reflect the original investment plus cap gains according to the 1099 they received?
Here's a great article that sums up the issue and states that the offset to the market value entry goes to equity as Unrealized Gain/Loss.
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