WebbDepending on the interest rate paid by Mr. X compared with the prescribed interest rate for shareholder loans, there may be a taxable benefit under s. 80.4 (2) of the Income Tax Act. Using the prescribed interest rates, the loan interest for 1 year from January 1 to December 31 2024 would be $2,000, calculated as: $100,000 x 2% = $2,000. Webbcharacterized as a business bad debt, the entire loss amount may be offset against the taxpayer's ordinary income under section 166(a). Oth-erwise, the bad debt will receive short-term capital loss treatment under section 166(d), which allows a maximum deduction from ordinary in-come of only 1,000 dollars.'

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Webb9 apr. 2015 · The shareholder's ending basis was $22931 for federal and state and $23534 for amt and wi amt. as this was a final return for the s Corp then balance sheet would have been zeroed out through liquidation and therefore the k-1 should have reflected this to the shareholderYour stock is a capital asset. Webb31 aug. 2024 · But see the safe harbor for “straight debt” under the S corporation rules. [xv] For example, a gift or a distribution. Of course, any “presumption” against loan treatment may be rebutted by an affirmative showing that there existed, at the time of the “loan,” a real expectation of repayment and an intent to enforce the collection of indebtedness. greek fisherman hats for men

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Webb15 juli 2009 · If a shareholder is compelled to make good on a corporate obligation, the payment of principal or interest in discharge of the obligation generally will create a “bad debt deduction.” However, that deduction may be classified either as a “business bad debt deduction” or as a “non-business bad debt deduction.” Webb6 juni 2011 · When Does a Shareholder Have Basis in S Corporation Debt Marcum LLP Accountants and Advisors Services Industries Firm People Insights News Offices Careers Events Newsletters Subscribe Client Portal Make Payment (855) Marcum1 Email Us Ask Marcum Prev All Next News March 31, 2024 WebbThe Ninth Circuit has held that a shareholder-employee’s business bad debt deduction for loans he made to his corporation as an employee was a miscellaneous itemized … greek fisherman hat style