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gatekeeper651
Level 1
March 2, 2022
Question

excess distributions taken due to having funds from EIDL Loans

  • March 2, 2022
  • 1 reply
  • 7 views

I am running into this more and more frequently - Scorp owners taking excess distributions with the EIDL funds so now I have negative equity.    Do I just make them pay capital gains?   What is everyone doing?

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1 reply

sjrcpa
sjrcpa
Level 15
March 2, 2022

Negative equity is not the problem per se.

If they have distributions in excess of basis it is taxable  to the shareholder as capital gain.

The more I know the more I don’t know.
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