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?


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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