Personal Loan to Your Own Business - Tax Write Off?

[hagnus]

Hi,

I've made a loan to my own personal business (LLC) and it's looking as though as while the business is running, it's not going to get into a state in the near future where it's going to be able to pay me back the capital that I put into.  Can I write that off on my personal tax return as a business loan write off? 

[DavidD66]

No.  I am assuming you are a single member LLC and file on Schedule C.   If that's the case, The IRS considers your LLC as a "disregarded entity".  You and your business are one in the same for tax purposes.  You cannot loan yourself money, forgive it, and then write it off on your taxes.  If your business has been showing net losses, then you are already writing off the amount you put into the business via the business loss.  

[hagnus]

Thanks for the response. So it isn't a single member LLC (there are actually around 4 members) How would that work?

[Mike9241]

it's still not deductible. It will be recorded as your capital contribution on the partnership return. For an S-Corp - return stock or paid-in capital. A return is required that was due 3/172025 unless extended. If it wasn't extended get it filed as soon as possible because the penalty for late filing (with 4 members) is about $800/month