Where on Schedule C expense do I enter a loan repayment that was from a realitive

[Ron1232585]

I borrowed money from a relative to start a single member llc.  I am looking at schedule C to try to find where I enter the loan repayment amoutn.

[CathiM · Accepted solution]

Paying back the principal of a loan is not a tax deduction but the interest you paid to them for the loan is a deduction on the interest expense line.  That is why you not seeing it as a Schedule C expense.  Maybe this explanation will help: they give you the money to use and then you eventually give it back.  When they loaned you the money it should not be reported as income on your tax return.  So when it is paid back it is not an expense, except the interest part.

[Cyberjonestaxes]

So if i was i loaned $50,000 from myself or a friend and it kept my business Afloat.. i don’t show it as income or a loan and just show a $50,000 loss instead?

[Critter-3]

A loan is NOT income nor is the payback an expense or a loss ...  so it is not listed anywhere on a Sch C form.   If you have a corporation the the loan will be reported on the balance sheet only on the corp return ... it is still not income or an expense.   If you pay interest on the loan then that is an expense. 

Now, what the loan paid for is an expense ... so if it paid rent, utilities, bought inventory then those items are deductible expense on the return.  So you got $50K and bought $50K of say inventory then only the inventory cost is entered on the return and not the loan.