How do i reflect on the shareholder basis form if the debt is reclassed to equity on s 1120 S
tax return.
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Can you clarify exactly who had the debt and what happened to "convert" it?
If the shareholder originally made a loan to the corporation and it is now reclassified as a "capital contribution", you just decrease the debt and add the capital contribution.
If that wasn't the situation, please give as much detail as possible as who had the debt and what exactly happened.
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