S Corp tax question

"linda" wrote

Nope. Loans made are assets, and until your company defaults on the loana you made to it, you can't deduct that amount.

Yes, if you have sufficient basis to deduct the losses.

Your questions lead one to believe that you would get some significant benefit from seeking professional tax help from a local CPA or EA.

-- Paul Thomas, CPA snipped-for-privacy@bellsouth.net

From the subject of your post, I presume these questions relate to an S corporation. No, a loan to the corporation is not a deduction on your personal taxes. It is an asset to you and a liability to the corporation. If you are a stockholder of the S corporation, it increases your basis for purposes of deducting your distributive share of the corporation's net loss, if any. If the corporation's operations result in a net loss, the loss passes through to you (and the other stockholders, if any) in proportion to your ownership percentage. It is deductible on your personal return as long as it does not exceed your basis in the corporation, which is increased by your loans to it. Katie in San Diego