Discussion:Tracking mortgage interest
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Discussion Forum Index --> Basic Tax Questions --> Tracking mortgage interest
Discussion Forum Index --> Tax Questions --> Tracking mortgage interest
Landon5784 (talk|edits) said: | 29 February 2008 |
| Husband and wife take 150,000 2nd mortgage on home (not equity or acquisition debt)and put entire proceeds into their small S Corp. How are you guy's treating this now that we have to trace the proceeds of loans and allocate the interest (ie put loan on Corp books and deduct interest there, or is it now all personal interest not deductable) Their actual situation is more complicated but the answer to this example will help me alot. (And I know we were always supposed to track the proceeds! So don't scold me on that; it's just that FTB is watchig more closely now). | |
Death&Taxes (talk|edits) said: | 29 February 2008 |
| Try this: Discussion: Interest Paid on Purchase of S-Corp Stock
or this: Discussion: S corp HELOC interest or Discussion: S Corp - Reporting interest paid on shareholder loans or Discussion: Interest Expense for sole S Corp S/H You pays your money, you takes your choice. Amazing what you can find in that little block to the left. | |
Landon5784 (talk|edits) said: | 29 February 2008 |
| Thanks Death & Taxes, I did look in discussion, but they raised more questions than answers. If the corp deducts and then issues the taxpayers a 1099-INT then it's just a wash. Income to the individual and deduction to the corp. Thats why I am considering ignoring it altogether (no 1099) and treating it as personal | |
Death&Taxes (talk|edits) said: | 29 February 2008 |
| But if you read Riley, you can deduct it on Sch E though on my software, the K-1 worksheet only tells us to list interest on loans to purchase S Corp Shares. | |
| 29 February 2008 | |
| In a different vein, C corp sole shareholder has a paid for house and borrows $400K against it and loans it to his company. I do the 5/31 YE C corp return and code repayments to the s/h as interest/principal (about 40K interest expense). Now it comes time to do his personal taxes this year and he is surprised that I want the rest of the repayments for 2007 so I can calculate the interest income/expense. I also tell him the home interest will offset some of his interest income as investment interest.
Then he says he want to only take principal payments and leave the interest accruing in the C corp (not deducting it since they are both cash basis). This doesn't seem right to me - anyone see how it can be done? | |
