Single Shareholder of S-Corp loans to S-Corp

[AZ-Tax]

First, is this common practice for a single Shareholder S-Corp? Would the Shareholder need to issue a 1098 to the S-Corp for interest received?

[Maribeth]

First, is this common practice for a single Shareholder S-Corp? Would the Shareholder need to issue a 1098 to the S-Corp for interest received?

1098? No.

1099-int from S-corp to shareholder for interest paid? Yes.

1099-int from shareholder to S-corp for interest paid? No.

Maribeth

[AZ-Tax]

So what form is issued to S-Corp?

1098? No.

1099-int from S-corp to shareholder for interest paid? Yes.

1099-int from shareholder to S-corp for interest paid? No.

Maribeth

So what is issued from Shareholder (who received interest from the S-Corp via loan to the S-Corp) to S-Corp if not 1099-int?

Ahh..1098 was suppose to be 1099 on initial post.

[Maribeth]

So what is issued from Shareholder (who received interest from the S-Corp via loan to the S-Corp) to S-Corp if not 1099-int?

Ahh..1098 was suppose to be 1099 on initial post.

If the S-corp paid interest income to the shareholder, then the S-corp will issue a 1099-int to the shareholder for the amount of the interest.

If the shareholder paid interest income to the S-corp, then the shareholder does not issue anything. (well, the shareholder could issue a 1099 but it is not required)

The payor issues the 1099 to the payee.

Maribeth

[AZ-Tax]

1099-int for loan interest?

If the S-corp paid interest income to the shareholder, then the S-corp will issue a 1099-int to the shareholder for the amount of the interest.

If the shareholder paid interest income to the S-corp, then the shareholder does not issue anything. (well, the shareholder could issue a 1099 but it is not required)

The payor issues the 1099 to the payee.

Maribeth

Maribeth, still 1099-int issued by S-Corp to shareholder even if the S-Corp paid loan interest (interest expense) to the shareholder, corrrect?

[Maribeth]

Maribeth, still 1099-int issued by S-Corp to shareholder even if the S-Corp paid loan interest (interest expense) to the shareholder, corrrect?

I think we are thinking along the same lines; just having difficulty in how we describe it

Example: shareholder Bob, S-corp Bobette's.

Bob loans $100000 to Bobettes. Bobettes pays Bob $5000 in interest and $10000 in principal for the year. At the end of the year, Bobettes issues a 1099-int to Bob for the interest that it paid Bob.

Bobettes has $5000 in interest expense; Bob has $5000 in interest income.

Is this your factual situation or is it the other way around?

Maribeth

[Uncle Sam]

Shareholder/S Corp Loans

Interest is DEEMED to have been paid whether actually or not, especially if the officer loan payable to the shareholder is $ 25,000 or more. In that instance a 1099-INT is required.

[BOB W]

Interest is DEEMED to have been paid whether actually or not, especially if the officer loan payable to the shareholder is $ 25,000 or more. In that instance a 1099-INT is required.

Good to know> When did they move it from $10.000 to $25,000?