Investing company - interest income

[Unregistered]

I have a client (partnership) thats only source of income is interest on a note. The intent is to have more people invest into the company and to lend money to new businesses. If the company is in the business of lending money, would it be more appropriate to report the income as gross receipts or interest income on Form 1065?

[Bees Knees]

Unless this business thinks it is a bank, it is investment interest, just like any other interest earned.

If they think they are a financial institution, they might want to read up on the million or so federal banking regulations that apply to financial institutions.

[Unregistered]

Unless this business thinks it is a bank, it is investment interest, just like any other interest earned.

If they think they are a financial institution, they might want to read up on the million or so federal banking regulations that apply to financial institutions.

That is what I said too but they were thinking otherwise. Just wanted to get a second opinion. Thanks!