How to record interest income from a business-to-business loan

I have a single-member LLC and executed a 2-year business loan agreement with a non-related single-member LLC. For 2023, I earned $360 of interest income based on the loan amortization schedule. The monthly loan payments will continue through 2025. I have documentation for the loan agreement, but where do I record the $360 of interest income and am I supposed to record the loan terms in TurboTax to make the business-to-business loan official from the IRS perspective or is my current loan agreement sufficient and nothing needs to be recorded or generated by TurboTax?

1033

Level 15

Mar 9, 2024 9:26:40 PM

if there was a business purpose behind the loan it's reported on the same form as the business (loan to a supplier, customer) or if it is the LLCs business to make loans. On Schedule C it would be other income. This is not possible on schedule E. Otherwise despite the loan coming from the business It would be reported on schedule B. The loan terms are never entered on a tax return. You might want to think carefully about Schedule C reporting since this would make it subject to-self-employment tax

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How to record interest income from a business-to-business loan