Question

Can the business repay some of the loan even if it doesn't make a profit

Forum|Forum|2 years ago
February 20, 2024
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Can a business repay a loan made by a partner even if the business has a loss at the end of the year

TurboTax Business Windows

Can you clarify the details of the loan? Is it a loan to the business made by the partner? If so, yes the business can repay the loan even if it did not make a profit. If it was different type of loan, please provide additional information.

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L

lavtrenAuthor

Yes it was a loan to the company by a partner. There is still a balance on the loan. Also when I loan cash to the business is it considered as a capital cash contribution and when I repay myself is it considered a capital xcash reimbursement. Not sure where to put the amounts in TurboTax Thanks for your help

V

Vanessa A

Just to clarify, I do not enter the loan payment in the partnership detail as capital contributed by the partner.

No. You do not enter the loan payment in the partnership details as capital contributed by the partner. A capital contribution would be something you gave in exchange for an increase in equity. A capital contribution is not a loan where there were terms and conditions that you would be paid back.

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