EIDL interest for closed S corporations

[Fdezwart]

I have seen posts on the internet that state to deduct this interest as a capital loss. Do you agree and where do I post it on schedule D?

[RobertB4444 · Accepted solution]

Business loan interest is deductible as a business expense.  If your business is closed then you don't have any more business expenses.  It is certainly ok to file a final S-corporation return that only lists expenses and no income in order to take this deduction.

If you have a business loan that you have converted to a personal loan because the business is closed but you are still paying the loan off then this is deductible as interest on your schedule A if you are able to itemize deductions.

@Fdezwart