Tax Law (Questions About Taxes)/S corp question

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Question
I'm a small s corp, and in 2013, I gave my business a loan to help pay bills.  In 2014, I did a little better; I didn't have to provide any additional funds, but unfortunately I didn't clear enough to give me a salary, but I could pay myself back some of the loan.  In 2013, I showed the loan from shareholders on Schedule L, line 19.  I'd like to pay myself back some of the loan, e.g., $500, but I don't understand how to reflect on the 1120 form.  Do I still show the ordinary business income on line 21, as a positive, and then use line 16e "Repayment of Loans"? and then also on Schedule L, line 19, reflect what the remaining loan amount is?

Alternatively, can I just leave that loan in the business (because I know I have bills coming due in first quarter), but how do I show that the business income is positive because I'm not repaying the shareholder loan?
I hope this makes sense.
thanks,

Answer
Brian,

Thanks for your question.

A loan repayment is not income.

Just show. The effect on line 16e and Schedule L as you indicate.

Hope this helps.  By the way be certain to show the authorization for the corp to borrow the fins from you in the minutes of the Board.

John L Staccil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

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I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

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I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

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DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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