Discussion:Interest on Shareholder Loan
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Discussion Forum Index --> Advanced Tax Questions --> Interest on Shareholder Loan
Discussion Forum Index --> Tax Questions --> Interest on Shareholder Loan
| 10 April 2008 | |
| 100% shareholder loaned money to C Corp. C Corp has not paid any interest yet. Do I accrue interest on the C Corp's books and then put it on Schedule M as a timing difference since none paid and C Corp is cash basis? Do I pick up any interest income on 1040 since none paid? | |
| 10 April 2008 | |
| C corp - cash basis
Shareholder - cash basis Interest is recorded when paid. However, check ยง7872. Imputed interest is a good way to get tripped up in an audit. | |
| 10 April 2008 | |
| Interest is deemed paid and reloaned, book it on the corp and pick up income on the 1040. | |
| 10 April 2008 | |
| Is there a loan agreement between the shareholder and the corp? Maybe the loan is without interest. You need an agreement to set the interest rate. | |
| 10 April 2008 | |
| In the absence of an agreement with stated interest, imputed interest would be at AFR I beleive. | |
| 10 April 2008 | |
| Read your Master Tax Guide. Foregone interest is imputed at the "blended AFR" 4.92% for 2007. | |
| 10 April 2008 | |
| Is the loan deemed a Constructive Dividend for failure to pay interest, year after year? | |
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