Babak
Level 3
‎03-27-2023 04:33 PM

My client received a Schedule 1120S K-1 with an amount in box 16 E. That reflects the amount business paid him back for the loan he made to the business during the year. When I entered that, it was added to his income while it was a loan payback. How can I fix that?

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PhoebeRoberts
Level 11
Level 11
‎03-27-2023 04:50 PM

Make sure your Form 7203 is prepared correctly. It's not unusual to have gain on a loan repayment in an S-corp, because you can take losses against debt basis.

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Babak
Level 3
‎03-27-2023 04:54 PM

But the whole loan is shown as income not a portion of it.

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PhoebeRoberts
Level 11
Level 11
‎03-27-2023 05:00 PM

So when you work through the Form 7203, how much basis does your guy have in the loan?

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Babak
Level 3
‎03-27-2023 05:53 PM

e whole remaining loan balance is in his basis.

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