LTSLLC wrote:

- quote -

That's it! Thanks Rudy.

If you'll allow me to summarize. Corp <-> shareholder loans
which in aggregate < $10K don't have to abide by the "market
rate" rules as long as they are not made with the principal
purpose of avoiding tax.

Makes some sort of sense, I suppose.

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Tony,

Here are some links for you:

IRC section 7872
http://www.law.cornell.edu/uscode/ht...2----000-.html

Applicable Federal Rates (APR)
http://www.irs.gov/taxpros/lists/0,,id=98042,00.html

Rudy
www.LizcanoTaxServicesLLC.com

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I seem to remember that there is some $$ limit below which
the IRS doesn't require "market" interest rates on loans
between major stockholders and a closely-held corporation,
but I'm darned if I can find any reference to it on the IRS
web site.

We've always been careful to establish a proper repayment
schedule for loans to/from our corporation for "big ticket"
items, but it struck me that the "small" stuff -- travel
expenses paid by stockholders in advance & not reimbursed by
the corporation immediately, say -- is technically a "loan"
& ought to be expensed with interest, even though the
amounts are just a few $K.

Anyone have any pointers?? Thanks.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >