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If a LLC member provided a loan to the company, and then is repaid that loan, does he pay federal income tax on the amount of the loan (i.e. is that loan repayment treated as income)?
Scenario: LLC has 2 members. One runs the company, the other provided the initial investment (in the form of a loan) in year one in which the company posted a loss. In year two, the company had a profit. Part of the profit went to repaying the loan. How is that loan repayment treated?
Scenario: LLC has 2 members. One runs the company, the other provided the initial investment (in the form of a loan) in year one in which the company posted a loss. In year two, the company had a profit. Part of the profit went to repaying the loan. How is that loan repayment treated?