turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

Balance sheet out of balance because of "loans from shareholder"

I have made Federal tax through TurboTax and started Balance Sheet for State taxes. If I add additional info in LIABILITIES as "Loans from shareholder" it shows that it's out of Balance. If I don't add this info it's fine. But in 2018 shareholder gave money to LLC (without interest), so I need to show it in Liabilities as it's not income. 
Should I add the same sum(loan from shareholder) in ASSETS somewhere to be in Balance?

Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Reply

Balance sheet out of balance because of "loans from shareholder"

Yes

When you made the loan to the entity, the entry should have been like this (assuming it was cash)


Debit Cash        $x,xxx

Credit Loans from S/H        $x,xxx

Thus at the time of the loan, balance sheet should have been in balance.

If want this to be truly a loan, you need to treat it as a loan...just as if it was from a third party.  A no interest loan may cause problems under IRC Section 7872.  See the link below.  You should also have plans on how the loan is to be repaid.  If no intention to be repaid, then it should be a contribution of capital rather than a loan.

https://taxmap.irs.gov/taxmap/ts0/belowmarketloans_o_3211d2c8.htm

                 


**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies