Adjusted basis of shareholders’ stock in tax-option corporation.
(a)#
For purposes of this chapter, the adjusted basis of a shareholder in the stock and indebtedness of a tax-option corporation shall be determined in the manner prescribed by the internal revenue code for a shareholder of an S corporation, except that the nature and amount of items affecting that basis shall be determined under this chapter. This paragraph does not apply to 1978 and earlier taxable years of corporations which were S corporations for federal income tax purposes or to taxable years of corporations for which an election has been made under sub. (4) (a).
(b)#
The adjusted basis of a shareholder in the stock and indebtedness of a tax-option corporation that has made an election under sub. (4m) (a) is determined as if the election was not made.