ILLMAS Posted August 18, 2020 Report Posted August 18, 2020 A used to operate a business and a acquired a loan from a family member, A closed down the business and let B (daughter) open up her own business and pretty much continued operations. The family member still wanted to get repaid and they started paying from business B, the loan was never accounted for in business B, how Would you account for it? Quote
Lee B Posted August 18, 2020 Report Posted August 18, 2020 You need at least some basic paperwork. Have A sell the business to B for $ 1 plus the assumption of the loan, otherwise the interest expense is still deductible on A's Schedule C. 1 Quote
DANRVAN Posted August 26, 2020 Report Posted August 26, 2020 On 8/18/2020 at 6:27 AM, ILLMAS said: how Would you account for it? As cbslee stated, the assumption of the loan should be treated as a sale of the business. What type of business assets were taken over by daughter and who is responsible for the loan if daughter also bails out? 1 Quote
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