1120-US: Calculating the gain recognized on repayment of a shareholder loan when the shareholder has more than one loan (FAQ)

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Question

How does UltraTax/1120 calculate the gain recognized on repayment of a shareholder loan when the shareholder has more than one loan to the S Corporation?

Answer

UltraTax/1120 does not support multiple shareholder loans when calculating shareholder basis. If there was a repayment of a shareholder loan during the year, and the shareholder has more than one loan to the S Corporation, you can enter an amount in the Basis used in calculating gain on repayment (Force) field in the Loan tab in View > Shareholder Information > Other Info tab > Shareholder Basis dialog. The amount entered in this field should be equal to the sum of the loan basis at the beginning of the year, the current year loans made to the S Corporation, and the amount shown as the loan basis restored on the Shareholder's Loan Basis Restored Worksheet.

Amounts entered in the Basis used in calculating gain on repayment (Force) field will be used when calculating the gain recognized on the repayment of shareholder loan, as opposed to the calculated loan basis. The calculated loan basis does not include any current-year loans to the S Corporation.

Related topic: 1120-US: Shareholder basis calculations FAQs

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