Can you clarify the details of the loan? Is it a loan to the business made by the partner? If so, yes the business can repay the loan even if it did not make a profit. If it was different type of loan, please provide additional information.
Yes it was a loan to the company by a partner. There is still a balance on the loan. Also when I loan cash to the business is it considered as a capital cash contribution and when I repay myself is it considered a capital xcash reimbursement. Not sure where to put the amounts in TurboTax Thanks for your help
A loan isn't a capital contribution. A loan appears on the liability side of the balance sheet of the business. A loan repayment isn't a capital reimbursement.
If the business files as a partnership (form 1065), the loan is reported on line 19a - Loans from partners of Schedule L.
If the business files as an S-Corp (form 1120S), the loan is reported on line 19 - Loans from shareholders of Schedule L.
Just to clarify, I do not enter the loan payment in the partnership detail as capital contributed by the partner.
No. You do not enter the loan payment in the partnership details as capital contributed by the partner. A capital contribution would be something you gave in exchange for an increase in equity. A capital contribution is not a loan where there were terms and conditions that you would be paid back.