My father-in-law and I are partners in a business. We file a 1065 partnership tax return. We have both have had to loan money to the business over the years, but this year, but business did well, and now the business has been able to pay us back some of the money we loaned. How do I handle this situation on my tax return. Does the business have to pay taxes on the money it pays back to us? Where does this go on the tax return, and where does it go on the balance sheet on the tax return?
