Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

S Corp loan from shareholder

EFCPA
Level 1
Shareholder made a loan to S Corp of 78,000. The S Corp had a loss of 50,000 which the shareholder deducted on 1040, leaving him with a 28,000 basis in the loan The S corp has no assets, and will not be able to repay the shareholder. It will be filing a final return in 2022. How does the 78,000 loan (which will be written off by the s corp) be reported on the 2022 return? Will it be considered tax exempt income? How does this effect the shareholder personal tax? Can shareholder expense the 28,000 as a bad debt on his 2022 1040? If yes, would it be business or non business bad debt?
0 Cheers
1 Comment 1
sjrcpa
Level 15

How about converting it to contributed capital?


Ex-AllStar