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Deadeye1985
December 7, 2024
Question

Due from Member

  • December 7, 2024
  • 2 replies
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I have a "due from member" amount on my QB that is showing as a "loan to member" on my balance sheet. My CPA did this due to a Covid-19 EIDL loan that inflated the business funds and resulted in the LLC paying out more than it took in as revenue. 

If the LLC "forgives" the loan it will trigger a taxable event. I have contributed/loaned money to the LLC through the years when there was extra available. Is there some way to offset the "loan" or "due from member" amount with these contributions?

Mud 

2 replies

BigRedConsulting
BigRedConsulting
December 10, 2024

If you give someone a loan and then forgive it - or part of it - the loan balance generally becomes income to the person you gave it to.  I'm not sure whether or not you have to report the income to the IRS, or how that's done.

    FishingForAnswers
    FishingForAnswers
    December 10, 2024

    @Deadeye1985  Well, if the amount you took out from the LLC was recorded as a loan to the member (You), and you contributed money back to the LLC since then, I would think that would be equivalent of you paying the loan back, no different than any other loan payment.

     

    There may be an issue of interest due on the loan depending on the specifics of your situation, but that's another discussion.

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