I'm only available on this forum, but I'll do my best to answer your questions here!
- While your loan does not affect the company's P&L, it does affect your basis. The amount you invested as a loan becomes your beginning basis.
- Yes, the loan is still your beginning basis even if it wasn't reported as a loan the first year. The ending basis is the loan amount plus any income or less any loss the company reported on your K-1.
- Since you invested more (increased your loan amount) in 2020 there should be an increase in your basis for 2020 of that amount as well as any income increase or loss deduction for the year's activities.
- The payback of the loan will reduce your basis by the total amount, but only down to $0, your basis cannot be negative. And yes, this is why you have to complete Form 7203 now. You will also report any income increases or loss decreases for the year.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
