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I own 50% of an LLC partnership. I as an individual received…

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I own 50% of...

I own 50% of an LLC partnership. I as an individual received a loan from my partner, a private equity firm for my 50% of the start up capital. That loan was to be paid back once the company is profitable. The entire capital amount is to be paid back this year through owner distribution. My half will then be paid back to my partner. Am I liable to pay taxes on that income even though it's a loan?

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

There is more detail I can offer but that is the gist.

Submitted: 4 months ago.Category: Finance
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Customer reply replied 4 months ago
I am active and receive a salary from this company. The private equity firm is a passive investor.
Answered in 2 days by:
3/16/2018
Financial Professional: Emilee Weaver, Certified Public Accountant (CPA) replied 4 months ago
Emilee Weaver
Emilee Weaver, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 90
Experience: VP, Director of Finance
Verified

Hi there,

You're loan is going to be considered separate / outside of your ownership. Basically, the equity company made you a personal loan and you used that loan to buy in. However, your income this year will still be based on your income on your K-1, just like you had paid in with your own funds. The IRS does not look at how you bought in. Does this help, or raise other questions?

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