How to pay myself back for personal loan to buy land for my business

Forum|Forum|3 years ago
December 24, 2022
6 replies
111 views

My spouse and I used our own money to purchase land under our 2 member LLC owned by myself and my spouse. Since business has a profit now and the title of the land is under the LLC. How do I pay ourselves back for the no interest loan to purchase the land? Not sure where to enter this in turbo tax.

TurboTax Home & Biz Windows

Best answer by Anonymous_

@Rick19744

It appears as if you simply made a contribution to capital (which can be returned to each member without consequence - unless the amount somehow exceeds your basis).

Anonymous_Answer

Level 15

@Rick19744

It appears as if you simply made a contribution to capital (which can be returned to each member without consequence - unless the amount somehow exceeds your basis).

doingmyowntaxAuthor

Level 2

Do I need to report this in TT on any form?

Anonymous_

Level 15

Not unless you are keeping a balance sheet.

Rick19744

Level 13

A few comments / questions:

Is the LLC filing a 1065 (you don't mention whether you are in a community property state)?
If the LLC is a separate entity and filing its own tax return:
- You indicate you used your own money to purchase, yet the purchase was titled in the name of the LLC
- Did you contribute $$ to the LLC?
- It's not really a loan if you are not charging interest. The IRS will just take the position that this is a contribution to capital (this depends on the response to a previous question)
As @Anonymous_ noted, this transaction appears to only be impacted by balance sheet accounts
Need to respond to the above to be more specific

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.