USA LLC Loan Tax Implications

Joined
Apr 9, 2015
Messages
1
Reaction score
0
Country
United States
If you have an LLC and take on a loan, can you repay that loan before the members of the LLC are taxed on the income or do you have to do it after?

So for example:
- LLC is split between 3 owners, 45/45/10
- LLC takes on a $200,000 loan (I assume the LLC does not pay income tax on that since you have a $200,000 liability as well)
- LLC generates $500,000 in revenue

LLC wants to pay off the loan, would it be
1. $500,000 revenue minus $200,000 liability (to pay off the loan) = $300,000 taxable income to be split 45/45/10
or
2. $500,000 taxable income split 45/45/10 then pay the $200,000 from the leftover money after individual taxes are paid on the $500,000?

Thanks!!
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top