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Shareholder Loans

Debt vs. equity: Classification counts when shareholders put money into their corporations

C Corporation, Capital Contributions (Equity), Closely Held Corporations, Debt-to-equity Ratio, Federal Income Tax, Shareholder Loans, Small Business, Small Business Owners, Small Business Tax Tips, Small Business Tips /

If you operate your business as a C corporation, how you put money into your company — and how you take it back out — can have a major impact on your tax bill. Payments from shareholders to fund the business can either be classified as capital contributions (equity) or shareholder loans (debt). That might sound […]

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Consider borrowing from your corporation but structure the deal carefully

C Corporation, Closely Held Corporations, Dividend Distribution, Shareholder, Shareholder Loans, Small Business, Small Business Owners /

If you own a closely held corporation, you can borrow funds from your business at rates that are lower than those charged by a bank. But it’s important to avoid certain risks and charge an adequate interest rate. Basics of this strategy Interest rates have increased over the last couple years. As a result, shareholders

Consider borrowing from your corporation but structure the deal carefully Read More »