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nynjcpa
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Joined: 12 Dec 2009
Location: United States
Online Status: Offline
Posts: 37

Posted: 03 Jan 2010 at 22:57 \| IP Logged

My REG exam date is 1/9/10, and I practice communication when I'm too bored of reading my tax book..

a friend of mine asked me that what are tax implication of loan vs capital contributions of a C corporation.

I was able to think of only few things.

loan - interest is deductible (up to investment income)
unlimited liability to creditor(not tax implication..)

capital - dividend is subject to double taxation.
limited liability to shareholder(not tax either)

can anybody help?

Thanks !

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