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Babak
Level 5
March 27, 2023
Question

Repayment of Loans from Shareholders showing as income in 1040

  • March 27, 2023
  • 1 reply
  • 14 views

My client received a Schedule 1120S K-1 with an amount in box 16 E. That reflects the amount business paid him back for the loan he made to the business during the year. When I entered that, it was added to his income while it was a loan payback. How can I fix that?

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1 reply

PhoebeRoberts
PhoebeRobertsIntuit Community Champion
Intuit Community Champion
March 27, 2023

Make sure your Form 7203 is prepared correctly. It's not unusual to have gain on a loan repayment in an S-corp, because you can take losses against debt basis.

    B
    BabakAuthor
    Level 5
    March 27, 2023

    But the whole loan is shown as income not a portion of it.

    PhoebeRoberts
    PhoebeRobertsIntuit Community Champion
    Intuit Community Champion
    March 27, 2023

    So when you work through the Form 7203, how much basis does your guy have in the loan?

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