Discussion:S-Corp Loan
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Discussion Forum Index --> Accounting Questions --> S-Corp Loan
Sjpaccounting (talk|edits) said: | 11 September 2007 |
| I have a client who is an S-Corp. His wife is a sole-proprietor of a different company. The S-Corp loaned money to the sole-proprietor for some start up costs. Is it ok to set up a loan on the S-Corp's books for this amount? | |
| September 11, 2007 | |
| Yes. Make sure there's a loan document that spells out the terms of repayment as well, and then have the client stick to the agreement. | |
Sjpaccounting (talk|edits) said: | 12 September 2007 |
| Thanks! | |
| 17 September 2007 | |
| Similiar question.
I have an LLC that will be filing a 1065 partnership form at tax time. If I fund the LLC business account with funds from my personal checking account,, can I set it up as a loan agreement whereby the LLC pays me back at a fair rate of interest? The loan payment out of the LLC would be an expense while the capital back to me would be a return of principal. I know I would have to declare the interest. personally.... Thank you! | |
Bushmaster (talk|edits) said: | 19 September 2007 |
| Yes | |
| September 19, 2007 | |
| The "loan payment out of the business" would be a reduction of the loan on the balance sheet, not an expense. The interest portion would be an expense to the LLC. I'm not sure what you mean by "capital back to me"? Do you mean the principle portion of the loan payment? | |
Bushmaster (talk|edits) said: | 19 September 2007 |
| "Do you mean the principle portion of the loan payment? "
That is the way I read it initially. | |
Punjabimunda (talk|edits) said: | 26 September 2007 |
| The client has closed the S Corp and the shareholder has loans from the S Corp. Since the S Corp is now closed, is the Loans to Shareholder considersed Distribution or Income on the indiviual's personal tax return | |
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