Send us a text
Taking money out of your business isn’t always tax-free. If you’re not tracking your basis, you could get hit with a surprise capital gains tax, even without selling anything. Let's break down what basis means, how it works differently for Partnerships and S Corps, and why overlooking it could cost you thousands.
🚀 Book your free demo call today! Click here or visit: https://taxelm.com/demo/
Chapters:
(01:06) What Is Basis and Why It Matters
Your basis determines how much you can take out of your business tax-free and how much loss you can deduct.
(01:44) Client Story: The $7K Surprise Tax Bill
A business owner thought their S Corp distributions were tax-free—until a capital gains bill showed up.
(02:23) Calculating Basis: Partnership vs. S Corp
Mike walks through the formula for both. Spoiler: only partnerships include debt in basis.
(06:20) Real-Life Example: Same Business, Different Outcome
Two identical businesses. One pays capital gains, the other doesn’t. The difference? Entity type.
(07:44) Why Basis Gets Miscalculated
Loans, poor bookkeeping, and switching accountants are common culprits behind basis errors.
(09:25) Planning Tips to Avoid Basis Mistakes
Track your basis annually, keep clean books, adjust distributions, or structure shareholder loans when needed.
Podcast Host:
Mike Jesowshek, CPA – Founder and Host of Small Business Tax Savings Podcast
Join TaxElm: https://taxelm.com
🚀 Visit: https://www.TaxSavingsPodcast.com
🚀 Check Out TaxElm: https://taxelm.com/
🚀 Join our Free Facebook Group: https://www.facebook.com/groups/taxsavings/
🚀 YouTube: www.TaxSavingsTV.com
👋🏼 GET IN TOUCH
You can Tweet @MJesowshek with any feedback, ideas, or thoughts about the lessons you've learned from the episodes. We want to thank you personally for tuning in 🙏
🙏 LEAVE A REVIEW
If you enjoy the podcast, please leave a 5-star review on Apple Podcasts or Spotify—it helps more business owners find the show ⭐
🎙 ABOUT THE PODCAST
The Small Business Tax Savings Podcast is your go-to resource for cutting-edge tax strategies to help entrepreneurs legally slash their tax bills. Hosted by Mike Jesowshek, CPA, this show breaks down complex tax topics into clear, no-fluff insights so you can keep more of your hard-earned money.
