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I gave a $15,000 loan to an S-corp where I have a 10% stake. The K1 I got this year only allows me an ordinary loss of $600. However, I know that this business will soon be shut down without the ability to back any of the $15k loan.

How would I be able to deduct the $15k loss of the loan on my personal taxes?

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Once the business is shut down, you'll need to show that the corporation is in bankruptcy and the amounts are unrecoverable. You can then report it as investment loss. I suggest talking to a tax adviser (EA/CPA licensed in your State), and maybe an attorney, on what the specific technical details are.

  • Do you know the specific forms I would file with the IRS? – Diamonds Dec 21 '16 at 18:49

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