Illni
Level 4
03-31-2023
02:29 PM
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My understanding is that a cash-basis corporation only shows the interest as an expense when it actually pays out the interest.
Could it be that you should be recording the imputed interest as other K-1 taxable income to the shareholder and then back it off as an adjustment to M-1? Corporation has 30 days from end of tax year to actually pay out the interest if they wish to record it as a deduction on the corporation.