Loan to Shareholder/Employee
I have an S-Corporation. I want to find a way to reduce my income so that my youngest son in college will qualify for more financial aid. I am thinking of "selling" the entire S-Corporation to my oldest son. Then I would like him to approve a loan to me from the company. For purposes of financial aid, a loan is not considered income. As an employee of my son's new company, I would take a salary of $37,000 and a loan of $37,000, each year for the next 3 years. Of course, I would have to pay fair market interest (around 5%) to my son's new company, but that should be about all. Then I will pay back the loan, or possibly even dissolve the company.
What do you think?
Last edited by Doctorisin : 06-17-2008 at 01:42 PM.