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    Mathandler1's Avatar
    Mathandler1 Posts: 87, Reputation: 2
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    #1

    Aug 29, 2007, 03:12 PM
    Adjustred Basis
    Could bond premium amortization, a corporate distribution to a shareholder treated as a return of capital in which gain is recognized to the shareholder, and depreciation cause a decrease to the adjusted basis? The only thing that I thought could cause the decrease is just the depreciation,but not 100% sure. Thanks!
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Aug 29, 2007, 05:21 PM
    A return of capital, if in fact it causes the bond principle to go down, can decrease basis on a bond.
    Mathandler1's Avatar
    Mathandler1 Posts: 87, Reputation: 2
    Junior Member
    		  
    #3

    Aug 30, 2007, 11:43 AM
    Even though the capital return is recognized as a gain by the shareholder, the capital return would still cause the basis to decrease? Very interesting. Thanks!
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    Aug 30, 2007, 01:27 PM
    Yes, life IS a sometimes when it comes to taxes.

    Glad to help!
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