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- Question About Form 7203 and Unrepaid Formal Loan After S-Corp Closure
Question About Form 7203 and Unrepaid Formal Loan After S-Corp Closure
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workhard2022
Level 4
6 hours ago
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Hello,
Could anyone please help me with a Form 7203 question related to a formal note/loan?
Case:
Layla is the sole owner of an S-corporation. On her 2024 Form 7203, there is a $150,000 formal loan to the corporation that originated in 2022. The business has not been profitable recently, so there was no repayment of the loan in 2024.
My question is: If the S-corporation permanently shuts down in a future year and the $150,000 formal loan has still not been repaid, will this create any tax issues for the owner, Layla? How is the unpaid formal loan treated upon dissolution?
Thank you in advance for any insights or experiences you can share!
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