S Corp Loan Basis

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  • Golden Rocket
    Senior Member
    • Jul 2007
    • 519

    #1

    S Corp Loan Basis

    I have learned recently that the IRS has influenced pending legislation to place a ceiling of
    $10,000 on loan basis stemming from undocumented and unofficial loans from shareholders.

    This means unless a loan document between the shareholder and corporation is drawn up, the deductibility of a shareholder's loss beyond stock basis would be limited to $10,000.

    Anyone aware of this, and know particulars??
  • BOB W
    Senior Member
    • Jun 2005
    • 4061

    #2
    Originally posted by Golden Rocket
    I have learned recently that the IRS has influenced pending legislation to place a ceiling of
    $10,000 on loan basis stemming from undocumented and unofficial loans from shareholders.

    This means unless a loan document between the shareholder and corporation is drawn up, the deductibility of a shareholder's loss beyond stock basis would be limited to $10,000.

    Anyone aware of this, and know particulars??

    The $10,000 officer loans limit has been in place for many years as it relates to not having to compute interest to shareholder. Anything over $10,000 interest was required. So it appears that they are now going to use that $10,000 limit for other usefull purposes ???????????
    Last edited by BOB W; 09-27-2007, 10:38 AM.
    This post is for discussion purposes only and should be verified with other sources before actual use.

    Many times I post additional info on the post, Click on "message board" for updated content.

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