Announcement

Collapse
No announcement yet.

Interest on a loan for a closd business

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Interest on a loan for a closd business

    My tax client closed out a business in 2011 that failed and is still paying on a loan from that business. Is the interest deductible in any way?

    Cathe

    #2
    Yes, as long as the loan or the assets acquired with the loan proceeds have not been converted to personal or some other use, the interest may continue to be deducted on Schedule C ... even though there is no longer any income being reported on that Schedule C. If the use of the assets bought with the debt proceeds changes, such as being converted to personal use or transferred to another business or investment, then the interest on the debt must be reallocated to the new use. (Regs ยง1.163-8T(j)(1))
    Roland Slugg
    "I do what I can."

    Comment

    Working...
    X