How do I record self-charged interest on form 1120-S?

ac-control · ‎February 16, 2026

I loaned money to my S-corp and we are charging interest as an expense. I have taken withdrawls from that account.

1. Should I record interest portion of that loan repayment as a expense?

2. Should I record that portion as an income on the K-1 form?

3. How should record this in QBO (expense account or income account)?

4. How should I record this in TT desktop (form 1120-S)?

MaxA1

Answers to your questions:

Yes, this is an expense for the company.
No, this wouldn't go on your k-1. The interest income will be entered separately on your personal return. Treat it as if you received a 1099-INT from the company.
Since this is an expense for the company, you would record this in the corresponding expense account.
This would be recorded as interest expense in TurboTax, for the business, and interest income in TurboTax, on your personal return.

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ac-control

As a clarification, this is for non-passive activity.

MaxA1

Answers to your questions:

Yes, this is an expense for the company.
No, this wouldn't go on your k-1. The interest income will be entered separately on your personal return. Treat it as if you received a 1099-INT from the company.
Since this is an expense for the company, you would record this in the corresponding expense account.
This would be recorded as interest expense in TurboTax, for the business, and interest income in TurboTax, on your personal return.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

ac-control

Thank you! I could not find online that clearly states about the interest income on personal TT vs. TT Business.

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