/biz/ - Business & Finance

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Anonymous Thu Nov 12 18:37:37 2015 No.959336 [Reply] [Original]

I own an S-Corp with access to a business line of credit that I've never needed to tap. Got a notice today that for a limited time, any loan balance will receive a rate of prime-minus-1% for the lifetime of that balance.

Can my S-Corp borrow the money and loan it to a shareholder at the same rate without a "constructive dividend" scenario?

>>	Anonymous Thu Nov 12 18:38:47 2015 No.959337 >>959336 That rate is locked in, btw, so it's a 2.25% loan until paid in full.

>>	iHaz !MILLiOnz/Q Thu Nov 12 18:42:19 2015 No.959340 As long as the loan to you (the individual) is at or above the AFR, you should be fine. Anything less, and you're likely to be recharacterized. https://apps.irs.gov/app/picklist/list/federalRates.html

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