Page 16 THE REVERE ADVOCATE – FRIDAY, OCTOBER 8, 2021 HOCKEY | FROM Page 11 Two Greater Boston League unbeatens clash tonight when Lynn Classical football travels to Everett's Veteran Memorial Stadium for a 6:00 p.m. kickoff . Lynn Classical (3-1, 3-0 GBL) Rams will invade Everett (3-0, 2-0 GBL) and try to put a blemish on the Tide's perfect mark and take over fi rst place in the league. Lynn Classical is led by the coach's son, Brian Vaughan at quarterback, who has passed for more yards (589) than any other GBL QB to date. Everett is led by QB Kamarri Ellerbe, BC-bound Ishmael Zamor and running back JC Clerveaux. Revere Girls Volleyball rolls to three straight wins Revere High girls volleyball rolls to three straight wins in the past nine days, including a 3-0 sweep of Everett, to improve to 7-6 overall on the season. Revere registered 3-0 sweep wins over both Everett and Somerville, both Greater Boston League opponents. The win over Somerville was especially satisfying since the Highlanders had swept Revere by the same score in their fi rst meeting earlier this season. Brothers Adam Marshall, left, a senior and Omar Marshall, right, a junior, are key members of the Everett fi eld hockey team. Both are also members of the Tide baseball team. (Steve Freker Photo) Revere had another big win on the road when they took a hard-fought, 3-2 win over a previously unbeaten East Boston Jets team. The two teams seesawed their way into a winnertake-all fi nal set, with Revere taking the fi rst two sets and Eastie taking the next two. Tied up at 2-2, Revere prevailed in the money set to win it, 3-2њ Revere was scheduled to host Medford today at 4:00 p.m., host Chelsea on Monday and then play on the road at Malden Wednesday, October 13. PARTNERSHIP AND S CORPORATION COST BASIS RULES C ost basis aff ects the tax consequences of many transactions to partners and S Corporation shareholders. Many businesses are conducted as partnerships or S Corporations. The function of a partner’s or shareholder’s cost basis in the entity and the importance of keeping track of it is as follows: 1. Determining how much a partner or shareholder may withdraw from the entity without recognizing any gain 2. Determining the allowable loss of the entity in any given taxable year the partner or shareholder is entitled to claim on his or her tax return. (Remember, these entities are fl ow-through entities. The profi t or loss is passed through to the individual partner or shareholder to be reported on Form 1040). 3. Determining the gain or loss upon sale of a partnership interest or stock in an S Corporation. SKATING CENTER www.Roller-World.com 781-231-1111 HELP WANTED Skate Guards • Snack Bar Adults Prefered - Hours Can Be Arranged Open 7 Days Per Week Call Jerry at 617-620-9201 or Michelle at 781-233-9507 Located at 425R Broadway (Route 1 South), Saugus MBTA Bus Route 429 Generally speaking, contributions to capital in increase cost basis, withdrawals decrease cost basis, profits increase cost basis and losses decrease cost basis. Each year, a partner’s or shareholder’s cost basis needs to be updated taking these factors into consideration. When a partner or shareholder withdraws more than his or her investment in the entity, there will be tax consequences. If, for example, a partnership has a $50,000 profi t for the year and each of the two partners withdraw $25,000, each partner will report $25,000 of income on his or her tax return. If each partner also withdraws $25,000, there would be no tax to be paid on the distribution itself. Each partner would report $25,000 of his or her share of profi t of the entity. This serves to increase the partner’s cost basis. The withdrawal decreases the partner’s cost basis by the same amount. Therefore, the net effect on the partner’s cost basis for the taxable year is zero. The partner does not pay taxes on both the $25,000 share of partnership income as well as the withdrawal of $25,000. If a 50% partner or shareholder contributes $10,000 in capital upon the formation of the entity, and his or her share of the entity’s loss during the year is $15,000, his or her allowable loss would be limited to $10,000. The remaining unallowed loss of $5,000 would be carried over to the following year. If the entity generates a profi t of $10,000 during the following year, the partner or shareholder will be able to off set his or her $5,000 share of the profi t with the unused carryforward loss of $5,000. One key diff erence with S Corporations and partnerships is that a partner’s cost basis will be increased by his or her share of partnership debt. A Shareholder in an S Corporation will increase his or her basis only by actually lending money to the corporation. Even recourse debt does not increase a shareholder’s cost basis in the corporation. If a partnership has significant losses during a particular year, third party loans taking out by the partnership will provide additional cost basis to the partners thereby allowing them to deduct losses in excess of their actual contributions to capital. In these situations, this can be a big advantage of a partnership over an S Corporation. Joseph D. Cataldo is an Estate Planning/Elder Law Attorney, Certifi ed Public Accountant, Certifi ed Financial Planner, AICPA Personal Financial Specialist and holds a Master’s Degree in Taxation.
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