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S corp and loan liability when bus closes

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Level 1

When a business closes but shareholder still owes bank for business loan, can interest on this loan be taken personally?   what about principal? 

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4 Replies 4
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Level 12

What about the principal: Principal repayment is never part of tax reporting. It is debt service.

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Level 1

I should have asked if there is any at risk loss on principal.

 

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Level 10

Making a principal payment on behalf of the S-Corp will increase the shareholder's basis in the S-Corp which, in turn, might free up some losses previously suspended due to lack of basis.

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Level 12

We don't know if there are multiple shareholders, and if the business closed, is the S Corp being terminated? That means assets and liabilities are being assumed by someone or what is happening?

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