Personal Loan to LLC
I started a Rental Property business(LLC) in 2017. I loaned my business $5,000.00 for start up purposes. Where do I enter this amount on my tax return? I am filing Schedule E with my personal return.
Hello, Becky. Thanks for the question.
For individual tax advice, you should consult a licensed accountant. However, we can tell you that generally personal loans to LLCs are treated the same way as capital contributions. When you contribute or lend money to an LLC, you’re generally able to recoup those funds later tax-free.
However, your loan to your LLC should not have any tax implications. You won’t be able to write it off as a deductible expense, but it also shouldn’t qualify as taxable revenue through your LLC. Because your loan isn’t income or an expense, it may not belong on Schedule E.
Again, this is all subject to individual circumstances, which is why it’s best to involve a professional accountant.
Hope this helps,