I
Independent_guy
Guest
Hi,
If a company (corporation) gets a loan how is it different than a present? The loan is not shown as income and therefore company will show less income for tax purposes and a present is like income for tax purposes?
If the amount is claimed to be a loan should it be registered as such by a lawyer or is it OK just to define it as such in the tax return/filing?
Also, I underrated the interest is tax deductible if it is a loan.
What is the main benefit of showing/registering it as a loan - showing less income for tax purposes or the interest on the loan being tax deductible?
Lastly, can you please recommend best option/terms when showing it as a loan:
- pay all interest and principal at the end of the term (like after 10 years) or pay principal + interest monthly? what is better for tax purposes but also from a managing paper work/effort perspective?
As you can see there is some flexibility in defining the amount and terms as the money might be coming from a family member.
THANKS.
If a company (corporation) gets a loan how is it different than a present? The loan is not shown as income and therefore company will show less income for tax purposes and a present is like income for tax purposes?
If the amount is claimed to be a loan should it be registered as such by a lawyer or is it OK just to define it as such in the tax return/filing?
Also, I underrated the interest is tax deductible if it is a loan.
What is the main benefit of showing/registering it as a loan - showing less income for tax purposes or the interest on the loan being tax deductible?
Lastly, can you please recommend best option/terms when showing it as a loan:
- pay all interest and principal at the end of the term (like after 10 years) or pay principal + interest monthly? what is better for tax purposes but also from a managing paper work/effort perspective?
As you can see there is some flexibility in defining the amount and terms as the money might be coming from a family member.
THANKS.