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RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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I am showing $55K of loans from shareholders repaid on ...

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I am showing $55K of loans from shareholders repaid on schedule L for a C corp. Where does this $55K show up on the 1120 page 1. As Other Deductions? How do I get the $55K taken off the revenue? Thanks, XXXXX XXXXX
Submitted: 8 years ago.
Category: Tax
Expert:  RD replied 8 years ago.

DId you take loan from shareholder for $55K? Are you repaying the loan back to the stockholder?

How did you report the loan when it was received by the Corp?

Customer: replied 8 years ago.
Reply to RD's Post:

Hi, thanks for helping me.
My wife and I are the owners and shareholders. We have loaned our start up company hundreds of thousands in hard cash expenses over the last 5 years. Last year, the company had enough sales that we started to pay ourselves back $55K of these loans.

We did not report the loans on a schedule L when we made them, we just reported expenses paid.

My question is, how do I get the $55K amount from schedule L to reflect somewhere on the 1120 page 1 so I can take it off the revenue. Is it an Other Deduction? Thanks!

Expert:  RD replied 8 years ago.

When you reported the expenses as deductions in the year you incurred it, there should have been loan from stockholder(a liability) on Sch L in order for the balance sheet to tally.

You cannot take the loan repayment amount off from the revenue. It is not a deductible expense. It is a repayment of liability.


Let me know if you have any question.


Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

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