If my small paypal business loan is counted as sales income on 1099 where can I deduct this income on Schedule C?

Forum|Forum|7 years ago
June 1, 2019
3 replies
0 views

I recieved a Paypal working capital loan in 2016. If it is counted as income on Paypal 1099k where can I deduct this amount and also can I deduct the fee asscociated with this loan which was $800?

TurboTax Self Employed Online

MichaelL1

Employee

Loans are not counted as income.

The fees paid to get the loan are deductible. Yes the loan fee is deductible.

When you enter the expenses for the Sch C business. there is a Section called Business Expenses, and under that "Other Common Business Expenses" and then go to "Other Miscellaneous Expenses" and deduct the amounts here for the fees paid (which includes that $800).

A

AngryatPaypal

SAME HERE 2016 30k now I'm screwed stupid paypal needs to be sued! Now the irs just took my whole refund. Paypal WILL NOT ADMIT THIS! BEWARE. Been fighting this since 2018.

A

AmeliesUncle

PayPal is obeying the laws by reporting the electronic transactions. They are not at fault.

You need to show the IRS that amount was not taxable income.

A

AngryatPaypal

Actually YES the irs is counting the loans as income! I just had to amend my 2016 tax return because paypal added my **bleep** loan to my 1099. Now my tax preparer is amending my 2017. I'm royally pissed! I have to pay back my refunds for those two years plus some. Also my 4k return was taken this year to pay for this! Not fair! My tax prep HR block has done extensive research on this and paypal won't admit it, but yes they do add the loan to your income. They need to be sued if you ask me! I'm screwed now because I'm trying to buy a home. If you get a cash advance from PayPal aka working capital it's added in as income. Because it's supposed to be used to purchase stuff for your business. Business expenses etc.

T

ThomasM125

What form was the loan receipts reported on?

I assume the loan has to be paid back, if so then it is not income in my opinion.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

Critter

Employee

Ok ... if PP is reporting the loan as income on the 1099-K form incorrectly and will not change it how it is reported then you must correct this on the Sch C yourself ... go ahead and add the loan in the income section then to an offsetting expense to negate that amount. Who ever is amending the prior year returns should have already thought of this solution. Then whatever you used the loan for (like inventory) will be naturally expensed in inventory or other expense. Also the interest or fee paid for the loan is also deductible.