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https://www.lawinsider.com/clause/loans-to-officers#:~:text=The%20corporation%20may%20lend%20money%20to%2C%20or%20guarantee,may%20reasonably%20be%20expected%20to%20benefit%20the%20corporation.
https://taxes.uslegal.com/articles/irs-treatment-of-loans-to-officershareholder/
In conclusion, whether a transfer from a corporation to an officer/shareholder will be treated as a loan or as compensation determines if amounts received must be included in a taxpayer’s gross income. This determination is made by courts through examinations of the conditions attendant to the transaction.
https://eminutes.com/ufaqs/can-a-corporation-lend-money-to-its-directors-andor-officers
But a corporation cannot loan money or property to, or guarantee the obligation of, any of the corporation’s, or its parent’s, directors or officers, unless the transaction is approved by a majority of the corporation’s shareholders entitled to act on the transaction. Cal. Corp. Code § 315 (a). A director or officer who is also a shareholder but who is eligible to participate in the transaction …
https://www.lawinsider.com/clause/loans-to-officers
The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiaries, including any officer or employee who is a Director of the corporation or its subsidiaries, whenever, in the judgment of the Board of Directors, such loan, guarantee or assistance may reasonably be expected to benefit …
https://groco.com/article/bus-lendingmoney/
A non-business bad debt is treated as a capital loss. A capital loss will only offset capital gains. If you realize net capital loss, you can then use the loss to offset up to $3,000 in ordinary income. When you lend money to your corporation, the interest that you will be paid back with will be deductible to the business, but taxable to you.
http://deanpaley.com/borrowing-from-your-corporation/
For example, let’s assume you borrow money from your corporation during 2012 and your company has a December 31, 2012 year-end. You have until the end of 2013 to repay the loan. If you do not repay the loan in time, then it will be added to your 2012 personal income for tax purposes. With proper planning around the timing of the loan, it may ...
https://www.thetaxadviser.com/issues/2015/jan/case-study-jan2015.html
The lack of a ceiling limiting the amount a shareholder can withdraw from the corporation is indicative of a constructive dividend rather than a loan. In addition, sizable advances in relation to corporate profits or shareholder salaries may also be evidence that a distribution is not a loan.
https://www.upcounsel.com/borrowing-money-from-your-own-corporation
Just be careful not to pay off the shareholder loan with another loan. This can put your personal income at risk. Exceptions to the One-Year Limit. Thanks to the Income Tax Act, there are a few exceptions to the one-year limit for borrowing money from your corporation. These include using the loan to buy: A home for personal use.
https://quickbooks.intuit.com/learn-support/en-us/help-article/accounting-bookkeeping/record-company-loan-company-officer-owner/L24scnR7O_US_en_US
The first step in recording a loan from a company officer or owner is to set up a liability account for the loan. Depending on the repayment time frame, the Account Type can be Other Current Liabilities (to be paid in full in one year) or Long Term Liabilities (to be repaid over more than one year). To set up the account: Go to Settings ⚙.
https://www.askspaulding.com/blog/shareholder-loan-compliance-issues/
As a quick fix, many shareholders will later classify the excess distributions as a “loan to shareholder.”. Again, simply calling it a loan on the books is not enough if the IRS gets a hold of you. 3. Put money into the corporation and then took it out in the same year. This usually arises when an S-Corp is in its first year or two of ...
https://www.stimmel-law.com/en/articles/borrowing-money-your-own-business-some-cautions
One of the benefits of owning one’s own business is the ability to use a separate taxable entity (at times) to transfer sums and borrowings back and forth for various economic purposes. While such key issues as your fiduciary duty to minority shareholders and third parties must be kept in mind, it is common for small business owners to both borrow and lend sums to their own …
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