In 2010, I gave a sizable loan to an LLC. I have a signed agreement saying they would repay the loan by the end of the year. When the time came, we mutually agreed to extend the time for repayment for another 12 months. Now the time has come, and they are again unable to repay the loan.
I am not willing to sue for the money, as the owners of the LLC are close, personal friends. Is there a way to count this money as some sort of "business loss"?
1 Answer from Attorneys
That's a question between you and your tax accountant as to how you want to treat the matter. I'm not a tax lawyer but if you lent the money as an individual which I suspect, you may be able to treat it as a loss to be accounted for in your tax return. What sort of effort you have to undertake to recover that money, if any, is another story, because if you aren't making any effort to recover it it's starting to look like a gift from the point of view of the Service.
Related Questions & Answers
-
Last year my partner and I took $2000 out of the revenue of our mutually owned... Asked 4/12/11, 12:41 pm in United States Iowa Tax and Taxation Law
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
