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 and loan liability when bus closes

Christine384
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? 

0 Cheers

This discussion has been locked. New comments cannot be posted on this discussion anymore. Start a new discussion

4 Comments 4
qbteachmt
Level 15

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

*******************************
"Level Up" is a gaming function, not a real life function.
0 Cheers
Christine384
Level 1

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

 

0 Cheers
rbynaker
Level 13

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.

qbteachmt
Level 15

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?

*******************************
"Level Up" is a gaming function, not a real life function.
0 Cheers