Is the loan repayment tax free to us and a write-off for the LLC?
The principal paid on the outstanding loan is not reported on either tax return. Any interest paid on the loan, however, would be income to the lenders and interest expense to the LLC.
As Mike9241 stated, loans are not amortized. The principal of the loan is reduced by the loan payments for both entities.
We highly recommend that you consult a local tax professional and/or attorney before you move forward with this venture. There are significant tax issues that need to be addressed (including entity formation and loan structure) that could impact your tax situation for many years.
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