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Calculate the loan basis restored on the Shareholder's Basis Worksheet

The loan basis restored is calculated on line 10 of the Shareholder's Loan Basis Restored Worksheet. This amount transfers to the
Loan basis restored
 line on the Shareholder's Basis Worksheet. If you want to change the amount shown on the basis worksheet, enter an amount in the
Loan basis restored (Force)
 field in the
Loan
 tab. If you don't want any amount to transfer to the
Loan basis restored
 line on the Shareholder's Basis Worksheet, enter
0
 (zero) in this field.
If the shareholder's loan basis was reduced by losses in a prior year, then the loan basis needs to be restored by any net increase in any subsequent tax year before the shareholder's stock basis can increase. Net increase is defined in Regulation 1.1367-2(c) as the amount by which the shareholder's items of income exceeds the items of losses, deductions, noncapital nondeductible expenses, and distributions. Capital contributions and any shareholder-deemed dividends aren't considered a net increase when calculating the restoration of loan basis.
Under Regulation 1.1366-2(a)(2), any shareholder losses disallowed by basis is treated as incurred by the corporation in the corporation's 1st succeeding taxable year, and subsequent taxable years with respect to the shareholder. Therefore, any prior-year suspended losses are included in the calculation for the current-year net increase.

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