Re: Tax considerations in financing business

From: "Melinda Johannes" <mbjohannes@hotmail.com>
Subject: Re: Tax considerations in financing business
Date: Wed, 11 Nov 1998 11:03:23 PST

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>Date: Wed, 11 Nov 1998 00:59:21 -0500
>From: "Steve Foulks" <steve_foulks@up.bresnan.net>
>Subject: Re: Tax considerations in financing business
>Assuming you are going to establish an S corporation, then the lending
>approach is meaningless.  Because an S corp. is a tax "conduit" (i.e., 
it
>tax attributes flow directly to the owners) the interest you earn from 
the
>loan will be offset by your share of S-corp separately stated interest
>expense.

Thank you for your comments, Mr. Foulks.  The reason I had
considered loaning capital to the S Corp is so that I have
the option of taking a loan payment from the store via an
on demand note, if my own personal finances warrant it, since
I won't be drawing a salary for the first two years.

I have substantial emergency funds, but wanted to use the
loan approach to leave my options as flexible as possible.

Is this necessary?  Can I just take a draw if I need to?

Thanks again.
mjb


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