Discussion:Shareholder Credit Card loans
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Discussion Forum Index --> Tax Questions --> Shareholder Credit Card loans
| 31 January 2006 | |
| My clients used their personal credit cards to purchase equipment to start new S-Crop. How should these loans be considered for tax purposes (corporate loans or shareholder loans)? | |
DR BRISKET (talk|edits) said: | 31 January 2006 |
| Technically, for a liability to appear on the S-Corp balance sheet, there should be evidence of indebtedness by the S-Corp.
My position is that a personal credit card transaction creates a loan to the shareholder on the balance sheet when the transaction incurs. You should encourage your client to obtain a credit card in the S-corporation's name. | |
DR BRISKET (talk|edits) said: | 31 January 2006 |
| Correction--the credit card transaction would create a loan FROM the shareholder. | |
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