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Guaranteeing a loan to your corporation? There may be tax implications
August 22, 2023
Categories: #hh, Business, debt deduction, loan, Tax
Let’s say you decide to, or are asked to, guarantee a loan to your corporation. Before agreeing to act as a guarantor, endorser or indemnitor of a debt obligation of your closely held corporation, be aware of the possible tax implications. If your corporation defaults on the loan and you’re required to pay principal or interest under the guarantee agreement, you don’t want to be caught unaware. A business bad debt If you’re compelled to make good on the obligation, the