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#2
04-11-2005, 09:46 PM
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 Re: S-corp basis from debt "Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote: - quote - > "anonymous" <k132052gh[at]yahoo.com> wrote:
The loans themselves have basis initially. If losses passed> > My son (a non-shareholder full-time employee of the s-corp) > > takes out a home equity loan and loans the proceeds to me. I > > then loan it to my 100% owned s-corp. All loans equal or > > exceed the AFR and are properly structured and documented. > > Basis? > No, loans do not affect basis. through to the shareholder exceed the basis in stock (thus driving the adjusted basis to zero), additional losses can be claimed against the loan, reducing its basis. The tricky part to this is what happens when the loan gets repaid, even through monthly principal/interest payments, which are likely in a well-drafted loan. Because the principal is paid on a loan with reduced basis there will be a taxable gain associated with each payment for the difference between principal paid and basis. This will be short-term gain in the first year of the loan. Once the loan is repaid, the shareholder now has stock with basis higher than liquidation value by the amount of loss allocated to the loan. This can be recovered as a long-term capital loss only upon termination of the corporation. -- Tom Healy, CPA Boulder, CO Web: http://www.tomhealycpa.com << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#1
04-11-2005, 04:37 PM
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| Re: S-corp basis from debt "anonymous" <k132052gh[at]yahoo.com> wrote: - quote - > My son (a non-shareholder full-time employee of the s-corp)
No, loans do not affect basis.> takes out a home equity loan and loans the proceeds to me. I > then loan it to my 100% owned s-corp. All loans equal or > exceed the AFR and are properly structured and documented. > Basis? Stu << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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04-07-2005, 07:33 AM
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| Re: S-corp basis from debt no comments? ok, how about this one then: My son (a non-shareholder full-time employee of the s-corp) takes out a home equity loan and loans the proceeds to me. I then loan it to my 100% owned s-corp. All loans equal or exceed the AFR and are properly structured and documented. Basis? << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
03-25-2005, 06:04 AM
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| S-corp basis from debt I own 100% of my S-Corp (in California). My spouse borrows 50K (in her name only but secured by our jointly-owned personal residence) from the bank and the proceeds of loan go into our joint personal checking account. I take the money and deposit it in the S-corp bank account as a loan to the S-Corp. Do I get basis from this transaction? << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| basis, debt, scorp |
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