1120S Shareholder loan; where do I place this to see if as a deduction in income

[ijanes]

In Turbo Tax Business 1120S for 2022,

where to I put a shareholders loan

Shouldn't this reduce income?

[Anonymous_]

You need to consult with a tax professional.

See https://taxexperts.naea.org/expertdirectory

Loans to shareholders are not deductible for the corporation and, in fact, the corporation will recognize income to the extent the shareholders pay interest on the loans. 

The loan would be entered on your balance sheet if you keep one.

[Fjbirch · Accepted solution]

Loans from shareholders or loans to shareholders go in the Balance Sheet as an asset or liability.

The loan itself is not a deduction... but when you use the proceeds to pay for company expenses, those expenses are deductible in your P&L... for example. You pay rent with the loan... the loan is not an expense but the rent it is. Payments to the loan reduces your note payable in the balance sheet... Payments are not expenses nor income..

Remember, for a loan to be a legitimate loan, you need to documented it as loan, with a Note Payable and paying interests , just like a loan from a Bank..

Hope it helps..