money lending company, where do you report loans given out?

[Chewie]

I have a client that has a money lending company. he lent out $920,000. He received $40,000 in interest in 2022. He is filing a schedule C. where do you put the $920,000? Thank you!

[Accountant-Man]

They would be assets on the balance sheet, if Sch C's had a balance sheet.

[Chewie]

Ahhh, that makes sense. Thank you!!

[qbteachmt · Accepted solution]

His money loaned to others is the same as money still in a bank = asset. Think of it as, "Money in other people's pocket." You don't report money in the bank; you report earnings on that money. The same is true for how this asset is in other people's hands. It isn't reported when paid out (lent) or when paid back. The opposite is true; borrowed money isn't the taxable event and payback isn't reported, either. It's the cost of the borrowing that would be reported for tax purposes.

[Chewie]

Thank you very much. This helps a lot.