INTEREST FREE LOAN TO MY LLC AND REPAYMENT

[Melwani4]

Back in 2021, I made an interest free loan to my LLC (Partnership between my wife and myself) - say $ 50,000

During the year, the LLC repaid the amount of $ 10,000

1. Where do I input the loan amount of $ 50,000 on the 1065

2. Where do I input the repayment amount of $ 10,000 on the 1065

3. Where do I input the balance amount of $ 40,000 on the 1065

Do I need to prepare an amended tax return for 2021 ?

Can someone guide me please ?

[PatriciaV]

The original loan would have been recorded as "Loans from Shareholders" on the Liability section of the balance sheet (the offset would be Cash).

The repayment on the loan would have reduced the liability balance (and also the cash account).

Since the tax return reported the ending balances of all balance sheet accounts, the "Loans from Shareholders" account would be the remaining balance on the loan.

None of these were taxable transactions, so there is no need to amend a prior year return. Simply report the current balance of the loan on your current balance sheet. You will most likely need to record some adjustment to equity in order to bring the balance sheet into balance.