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Level 2
April 26, 2022

Gain on Repayment of Loan and Form 7203

  • April 26, 2022
  • 1 reply
  • 13 views

Before the form 7203, lacerte would export repayment of shareholder loan to the personal tax return on the schedule D.  With the 7203, it lists the repayment as non-taxable on line 26 and line 33 so it doesn't show as a reportable gain (line 34) which means it doesn't export it as a gain to the taxpayer.  How do you tell Lacerte it's taxable?

 

 

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    1 reply

    Level 15
    April 26, 2022

    Maybe I'm missing something, but why would a repayment of a shareholder loan be taxable?

    abctax55
    Level 15
    April 26, 2022

    @TaxGuyBill 

    If the loan has been used a *basis* to allow deducting prior losses, the subsequent repayment can become a taxable transaction.

    @AlexBeaudry 

    All entries dealing with this are in Screen 20.2, under *Sections* - Basis Limitations (7203).   You may have to do some overriding (Stock basis at beginning, loan balance at beginning, etc )if you are sure that the repayment is taxable.  

    HumanKind... Be Both
    Level 15
    April 26, 2022

    @abctax55   Thank you, I didn't think about claiming losses due to the Debt Basis.