S Corp

[Just Me]

I have an S-Corp that has portfolio investment income.  Does this not count as part of their basis?

[sjrcpa]

Yes it does.

[IRonMaN]

How does everything look once you have the balance sheet prepared?

[Just Me]

The balance sheet balances.  I'm sorry but this is the first time I have had any business do any investments with investment companies, not a CD in a bank.  I have Lacerte to balance with the portfolio income & expenses on the M1 & other sch K items. But nothing really showing up on the K1. Your help will be greatly appreciated.

[IRonMaN · Accepted solution]

The investment itself really isn't any different than a CD in a bank.  The only difference is the earnings being generated from the investment.  Instead of just interest, you could have interest and dividends and possibly a capital gain or loss to report.

[Just Me]

Mr. Iron Man--

I am correct that Unrealized gains & losses are not included on the K1s?  

Also are investment fees deductible, if so, would that be box 12 cod L deductions - portfolio (other)?

Thank You so much for helping in advance

[sjrcpa]

Unrealized gains and losses are not taxable income and would not show up on the K-1 (unless certain mark to market (?) elections have been made.)

Investment expenses are no longer deductible by individuals.