- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Deductions & credits
this becomes in part a legal question because the purpose of forming an LLC is to avoid having to pay that debt.
check this article to see if you had any legal liability to pay the debt or alternatively consult a lawyer.
https://www.nolo.com/legal-encyclopedia/personally-liable-llc-corporate-debt-bankruptcy.html
so if you had no liability to pay, the $20K wouldn't be deductible. however, there is a giant loophole. paying that debt to maintain your business reputation might allow a deduction.
also see this article - Owners liability after LLC is closed or dissolved
https://kkoslawyers.com/owners-liability-after-your-llc-is-closed-or-dissolved/
if you conclude or get legal advice that the debt is deductible it would be reported on the same form used in the past.