My S Corporation paid back part of its loan to me, how to account for on tax return?
Posted on March 21, 2009 by admin
DJP asked:
I’m thinking that all I have to do is adjust the “loans from shareholders” part of the balance sheet on the 1120s. Is this correct? Any insights is appreciated.
I’m thinking that all I have to do is adjust the “loans from shareholders” part of the balance sheet on the 1120s. Is this correct? Any insights is appreciated.
Thank you.
I am thinking you are confused. Why should your corporation pay back a loan TO you?
Yes, whatever cash account is on the balance sheet will be reduced by the amount paid back, as will the liability (due to/from shareholder (or loans from shareholders, as you call it).
Good luck! Not many people can manage an 1120S on their own- I’m impressed. :0)
Dude…if you are running an S corp, especially if you are doing fancy schmancy stuff like loaning yourself money, you NEED a tax professional handling this stuff for you.
Not doing so means you will inevitably make mistakes (like listening to people on YA on how to fill out your tax forms, lol)…..then the veil of corporate protection will be pierced and the IRS will treat you as a sole proprietorship, tax the hell out of you, and level abusive fines.
Never skimp on your lawyer, your accountant or your doctor. You’ll end up in jail, broke and then croak.
yes – it’s strictly balance sheet related – no effect to income except for any interest involved (expense for the corp – income for you on 1040)