Self-Charged Interest
From TaxAlmanac, A Free Online Resource
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From TaxAlmanac
Interest resulting from loans between a partner and a partnership and a shareholder and an S Corporation can result in self-charged interest income and deduction. Self-charged interest is treated as passive income and deduction as opposed to portfolio. The self-charged interest rules do not apply if the entity made an election under Regulation 1.469-7(g) to not have them apply.
