Making loans to your corporation became a lot more hazardous back in 1986 thanks to the Tax Reform Act passed that year.
But you ain’t seen nothin’ yet…
The new Tax Cuts and Jobs Act makes things far worse for tax-years 2018 through 2025!
We’ll tell you exactly what lawmakers did when you read my new article titled Tax Tips: TCJA Tax Reform Creates Big Hazard in Loans to Your Corporation.
Three ways our fact-filled article can help you:
- We’ll explain the new problems you’ll have to face. The Tax Cuts and Jobs Act can rob you of any tax deduction for a bad debt that arises from a loan you make as a shareholder-employee to your corporation. Be aware. Be careful. Read the full article.
- We’ll tell you why now is the time to get real! If your corporation needs a loan, ask yourself this question and answer honestly: “Is my business going to make it?” If you don’t think so, don’t make the loan. It will simply delay the inevitable and cause you big, costly problems later on. All will be explained when you read the full article.
- You’ll learn something you can do. (It’s not much, but it’s better than nothing. If you think your corporation is going to fail, but against your better judgment you still want to make the loan, consider making an additional investment in the corporation, called an additional contribution to capital. If you go this route and the business fails, you generate a capital loss. Although the limit on net capital losses (after offsets with gains) is $3,000 a year, that’s certainly better than no deduction at all. We’ll tell you how to take that step when you
read the full article.