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Tax.appeal.168, Tax Accountant
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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: