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At-Risk amount SMLLC

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    #1

    At-Risk amount SMLLC

    Client (single member LLC) started a chiropractic business. Borrowed from grandma $50k. This first year has substantial losses ($25-30k). Is he at risk for the $50k so he can deduct the losses? He put in $4-5k of his own money. (Hasn't been out of school long enough to have assets.) He would need to have a written promissory note, correct?
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    #2
    At Risk isn't my favorite subject, but hoped someone would pipe in on this. The instructions on this read very confusing.

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      #3
      I don't see a problem

      with your client taking the losses. He is either personally responsible for the debt or the money is a gift from grandma and a capital contribution by him.

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