Imputed Interest

[BOB W]

[QUOTE=veritas;41572]Bob W,

What gl software are you using?[/QUOTE

Creative Solutions...............

[JAinNC]

Can someone provide me with a calculator to arrive at imputed interest on a S Corp loan from shareholder with uneven (not regular) payments.

Thanks,

Sandy

I realize you asked about loans from S-corp to shareholder. Isn't a C corp loan to shareholder required to charge interest on the loan and the shareholder must include the interest in income?

[veritas]

We have used this software for years.

Bob W,

What gl software are you using?

[BOB W]

TValue software is excellent. It can handle anything including irregular payments, balloon payments, etc. It lists for around $130-149.

I purchased TValue last fall and Yes, it is the best. My G/L program will import the monthly interest from TValues amortization statements automatically.

Actually it is not from the printed statement but from a file TValue creates along with the printed statement that becomes part of my program's files to access during the data entry input. When the check is entered it splits principle and interest (proportionally) and post each to the correct gl account.

[KJ Judd]

TValue software is excellent. It can handle anything including irregular payments, balloon payments, etc. It lists for around $130-149.

[veritas]

Cash basis or accrual

Transactions between related parties is cash basis as far as taking a deduction on the business return.

[BOB W]

It's income to the shareholder as it accrues. It is not a deduction on the Corporation until paid.

That Is interesting, as many believe the corp deduction happens at the same time interest is accrued, but it makes complete sense ( deduction only when paid). Thanks.... is that the same for accrual taxpayers.

I'm confused why the thread is looking at imputed interest computation for this type of officer loan??????

Imputed interest happens when there is no or below interest stated on loan.

[Bird Legs]

Lion-Tax Tools

I use the Small Business Tax Tools -Tax Corresponder & Tax Tools. You just have to look at them and see what all calculators they have included. Could not get through the year without them.
Go to: www.taxtools.com or call 800-343-1157

[veritas]

One problem

It's income to the shareholder as it accrues. It is not a deduction on the Corporation until paid.

[BOB W]

Shareholder Loans

I don't think that imputed interest is calculated when it comes to shareholder loans to his/her corporation.

I believe it is a straight interest calculation on the loaned amount, no reduction of the principle at this calculation point.

Amount of loan X % X period of time. This interest is deducted as an expense to the corporation and credited to accrued interest payable to shareholder. The K-1 should show Interest income to the shareholder.

Any future payments to the shareholder to reduce the loan should first be debited to this accrued interest payable and the balance to reduce "Loan from Officer".

Since the Officer was charged this interest on his personal tax return, all of any payment should not reduce the loan in full by the amout of the repayment. I like this way because his basis in the corporation remains high for other reasons.

I would like to hear any negatives on this thinking.............

[Lion]

Tax Tools

There seems to be more than one product on the Tax Tools website. Do any of you users have any insight into what their usefulness is? What do you use, and for what purposes?

[peggysioux]

Excel Spread Sheet

Frog, could you also e-mail a copy to my address as well at "sherman1@citlink.net"?

Much appreciated.

[Gene V]

Sandy, I thought that you use Tax Tools, if you do, they have a irregular loan calculator.

[Lion]

Spreadsheet

Cord, would you please email me a copy, also? Thank you very much.

RitaLewis@DollarsSense.biz

[Uncle Sam]

Imputed Interest

Sandy - if you go to http://www.accountantsworld.com, scroll down, and on the left you'll find "Tools of the Trade" - there will be Financial Calculations.