Sarah has advanced money to her corporation. What tax issues should she consider with respect to this money?
What will be an ideal response?
• Is it equity capital or debt?
• Is there a written unconditional promise to pay on demand or on a specific date a certain sum of money in return for an adequate consideration in money or money's worth, and to pay a fixed interest rate?
• Is the debt subordinate to or preferred over other indebtedness of the corporation?
• What is the ratio of debt to equity?
• If debt, is the debt convertible into stock?
• What is the relationship between holdings of stock in the corporation and holdings of the interest in question?
It is important to distinguish between capital and debt. Interest paid with respect to a debt instrument is deductible by the payor corporation, whereas dividends paid are not.
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English is more easier for Kim than math is
What will be an ideal response?
The net cash flow from operating activities is calculated in the same way, whether the company uses the direct or the indirect method of preparing the statement of cash flow
Indicate whether the statement is true or false
To help eliminate conflicts of interest, Sarbanes-Oxley prohibits all the following activities by audit firms for their clients, except: ______
A) the design and implementation of financial information systems. B) actuarial services. C) management functions and human resources. D) having multiple clients whose interests may be adverse to each other.
An income guarantee of $10,000 per year for all families is established with a phase-out rate of benefits of 50 cents per dollar of earnings. Then it follows that:
a. only families with earnings of less than $10,000 per year will receive transfers. b. all families with earnings of less than $20,000 per year will receive transfers. c. all families with income of less than $30,000 per year will receive transfers. d. all families will receive transfers.