How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Tax.appeal.168 Your Own Question
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 3447
Experience:  3+ decades of varied tax industry exp. Tax Biz owner
58285678
Type Your Tax Question Here...
Tax.appeal.168 is online now
A new question is answered every 9 seconds

I sold my business in May 2010. Originally I had a loan to

Customer Question

I sold my business in May 2010. Originally I had a loan to purchase the business. Sale proceeds went to pay off another loan I had still leaving the business loan active.

Can I still claim a deduction for the loan interest paid after my business was sold?
Submitted: 5 years ago.
Category: Tax
Expert:  Jax Tax replied 5 years ago.

Jax Tax : Yes, if a partnership or sub S, list as unreimbursed partner expense on sch E. If a sole prop, sch C, if a c corporation you are out of luck.
JACUSTOMER-nfait5ap- :

Have no idea what schedules you are referring to. I don't think we have these in New Zealand

Jax Tax : I am sorry. I thought this was a US tax question. I will recategorize it.
Expert:  Tax.appeal.168 replied 5 years ago.
Hello, THANK YOU for choosing Just Answer. My goal is to help make your life...a little...LESS taxing.

Interest paid on loans taken out by businesses is a deductible expense from your final profit or loss figure when your tax bill is calculated. The loan interest can only be deducted from profits if the loan is exclusively for a business purpose or a property letting if it is part of your business premises.

-------------------------------------------

My interpretation of the above is in order to deduct the interest, you have to still own the business.

You can refer to the following for more detail:

http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1073791587&type=RESOURCES