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March 13, 2025
Question

Do I file the non-interest loans that I gave to my LLC?

  • March 13, 2025
  • 2 replies
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My business Partner and I gave non-interst loans to our LLC. Where in the business or our personal taxes do we file those loans. We are a very small company that was created to produce a fiction podcast.

    2 replies

    March 13, 2025

    When you're entering the information about each partner into the partnership return there is a section where it will set up each partner's basis in the partnership.  It will ask about money paid in to the partnership as well as money taken out.  That is where you're going to enter the loans that you each made.  

     

    The loans are just that - loans.  They don't effect the taxes for the partnership or the partners personally.  They just increase the value of the shares you own in the partnership.  At some point you can pay the loans back to yourselves and that won't effect the taxes either.

     

    @mdvashro 

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    Rick19744
    Employee
    March 13, 2025

    Let's clarify a few things:

    • A loan to your LLC should be recorded on the balance sheet of each respective entity 
      • Should be recorded as a loan receivable on the business that loaned the $$
      • And as a liability on the business that borrowed the $$
    • Keep in mind, that the IRS, will most likely challenge this position if audited,  if there is no interest rate.
    • They will take the position that this is truly a capital contribution.
    *A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.