Calculate the gain recognized on a shareholder's loan repayment

UltraTax CS follows Revenue Rulings 64-162 and 68-537 when calculating the gain on partial repayment of a reduced-basis shareholder loan. The nontaxable return of loan basis is calculated by taking the basis before the loan was repaid as a percentage of the balance of the shareholder loan at the beginning of the year. The total loan repayment for the year is multiplied by this percentage to calculate the nontaxable return of the loan basis. The difference between the loan repayment for the year and the nontaxable return of the loan basis is the gain recognized on repayment.
The gain on partial repayment of the shareholder loan is calculated on the Shareholder's Basis Worksheet, Page 1, and transfers to the Schedule K-1 statements, Box 17 code for Other Information.
If you want to change the amount of gain displayed in the K-1 statements, enter an amount in the
Gain on repayment shareholder loan (Force)
field in the
Loan
tab. If you don't want any gain to display in the K-1 statements, enter
0
(zero) in this field. The Shareholder’s Basis Worksheet doesn't reflect amounts entered in the
Gain on repayment shareholder loan (Force)
field.
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