Question

Business purchase

Forum|Forum|11 months ago
April 8, 2025
1 reply
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I bought a business for 30k in 2024, which included 10k of inventory. I borrowed 18500 from a heloc and the rest from family. Where do i allocate the purchase loans?

Thank you

TurboTax Self Employed Online

VictoriaD75

What type of business entity did you establish? Is it a sole proprietorship, LLC, S-Corp, etc.? Loans are liabilities and are balance sheet accounts. They are not expenses that affect taxable income. Personal loans are also not business loans. For example, you personally took out the HELOC, the business did not. You then invested the funds into your business. Your own investment in a sole proprietorship, for instance, is considered owner's equity, not a business liability.

@Rmn007gomez

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