100% Shareholder loaned $450k directly to S corporation. Interest has never been accrued. Although with shareholder on a cash basis, it would have been suspended for tax purposes, so I never worried about it.
In 2007, S corporation paid $20,900 of loan payments (no interest recorded). S corporation ceased business in early 2008. Interest should be some portion of the $20,900.
However, given the corporation is now out of existence and only a 100% shareholder, doesn't it become a wash? Interest expense on the corp which flows through to 100% shareholder and offset by interest income on shareholder individual tax return? (Shareholder is a CPA and prepares own individual tax return. So my main concern is doing the S corporation correctly.)
Trying to get some of these extended returns done before I go on a family vacation next month. Thanks for your thoughts.
In 2007, S corporation paid $20,900 of loan payments (no interest recorded). S corporation ceased business in early 2008. Interest should be some portion of the $20,900.
However, given the corporation is now out of existence and only a 100% shareholder, doesn't it become a wash? Interest expense on the corp which flows through to 100% shareholder and offset by interest income on shareholder individual tax return? (Shareholder is a CPA and prepares own individual tax return. So my main concern is doing the S corporation correctly.)
Trying to get some of these extended returns done before I go on a family vacation next month. Thanks for your thoughts.