If you make a loan and it goes bad, the IRS may step in and decide whether your loan was “real” or “fake.”
The distinction is an important one. You see, real uncollectible loans give you tax-favored, bad-debt deductions. Uncollectible fake loans are deemed undesirable capital contributions and nondeductible gifts.
If you want to audit-proof all your business and personal loans, don’t miss my latest article titled Tax Tips for Making Business and Personal Loans Correctly.
Three ways our fact-filled article can help you:
- We’ll define what the IRS says a “real” loan is. Tax law allows you to deduct bona fide debts owed to you that become worthless within the taxable year. But what does “bona fide” mean? You’ll find out when you read the full article.
- We’ll list the nine questions you should ask yourself before you make ANY loan. These are vitally important questions that anyone making a load should be aware of. You’ll find them listed when you read the full article.
- We’ll provide detailed answers to these important questions. Not only that. We’ll provide (as always) specific references to the relevant tax law. Don’t miss the valuable information we have to offer when you read the full article.