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Old 07-22-2009, 01:22 PM
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Officer Loan To C Corporation

Officer lends proceeds received from a loan collateralized by real estate to his c corporation. C corporation pays P & I on the loans.

The C corporation signs a note for the proceeds to the officer and will give the officer a 1099-Int for the year. Does the loan from the officer to his closely-held C corporation qualify as an "investment"? Want to offset investment interest income against the real estate loan interest (in excess of the mortgage interest allowed).



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Old 07-22-2009, 10:44 PM
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That is really an interesting situation, I personally have never been exposed to your specific situation. However, I think conceptually at least, absent a specific IRS code prohibiting this interest to qualify as an investment interest income, you would seem to be able to qualify "this interest income from the C corporation as an investment income" that can be offset against real estate interest expense!

Still, I would refer to your tax accountant who is preparing your C corporation tax return to ensure that the loan is properly documented and is an arms-length transaction.

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Old 07-27-2009, 02:40 PM
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Thank you for your reply. Helps to have another's insight.



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