Let’s contend the crony as well as I any used $10,000 any from the personal assets to begin up the tiny business. We compensate ourselves the income any month though how does the commercial operation pay off the begin up money? Is it the seperate remuneration from the salary? We do not explain it as income, correct?
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{ 1 comment… read it below or add one }
Pretty simple really. Decide on an interest rate, about how much you would like to receive a month, and have your accountant amortize the “loan.” Then just pay yourself that amount, in a separate check each month. The interest is expensable. You do not have to claim the principle as income come tax time, but you will need to claim the interest. Your accountant should draw up a 1099-MISC for you.