#22: Money To and From Your Company: For Owners, Executives, and Family

Applies to: Stockholders, partners, board members, employees, family members, and affiliated businesses owned by the company or its stockholders personally.

It seems simple enough: You need cash and the business has surplus money so you borrow from the company. Be careful: The IRS could decide that the transfer of money was not a loan at all, and reclassify it as taxable compensation to you or, worse, a dividend, which makes the loan amount taxable income to you but not tax deductible by the company.

That’s the big trap when you borrow from your company. Whenever the line between personal and business dealings gets fuzzy, as it does in personal loans from company funds, the IRS can be expected to step in and start drawing its own lines. And that can cost you plenty in additional taxes.

This Resource Report shows you how to protect yourself by structuring the loan properly and steering clear of any restrictions or prohibitions.

Other topics: Restrictions in corporate charter, bylaws, and third-party agreements, tax issues, cost basis, constructive distributions, loans from pension plans and affiliated businesses, intent to repay, and specific references to the relevant sections in the Internal Revenue Code.

Price: $39.00   |   Pages: 7

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