- Joined
- Dec 5, 2007
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Hi All,
Assuming $100,000 down-payment, that a corporation is purchasing the property and you have to use your own money for the $100K down-payment:
1. What is the most common/recommended way to define the amount you put down (100K)? As a loan?
2. Should it be registered with a lawyer or not necessarily?
3. What is the recommended interest (5%, 20%!?) and is there complete flexibility in deciding on the interest/the "financing conditions"? I mean it is between you and your corporation
4. What is the MAIN purpose/benefit of doing the above? That the interest on the down-payment loan is deductible? (I mean when paying back interest, I`ll be paying myself - Corp. to Corp owner, so not sure) OR: that by doing it this way the amount can be shown as a LOAN and NOT INCOME? (well, I guess it wouldn`t show as income anyway since a few days after the deposit into the business account, the 100K down-payment is withdrawn from the account to pay for the property)
It is the first time I consider doing the above, because for the previous purchase down-payment amount was much lower. I am putting much more down now.
(I know I can ask my accountant/lawyer the same questions however a. I find there are cases where invetors provide more relevant info! and b. perhaps other investors here have similar dilemmas and would like to learn more about it too)
THANKS & REGARDS,
Neil
Assuming $100,000 down-payment, that a corporation is purchasing the property and you have to use your own money for the $100K down-payment:
1. What is the most common/recommended way to define the amount you put down (100K)? As a loan?
2. Should it be registered with a lawyer or not necessarily?
3. What is the recommended interest (5%, 20%!?) and is there complete flexibility in deciding on the interest/the "financing conditions"? I mean it is between you and your corporation

4. What is the MAIN purpose/benefit of doing the above? That the interest on the down-payment loan is deductible? (I mean when paying back interest, I`ll be paying myself - Corp. to Corp owner, so not sure) OR: that by doing it this way the amount can be shown as a LOAN and NOT INCOME? (well, I guess it wouldn`t show as income anyway since a few days after the deposit into the business account, the 100K down-payment is withdrawn from the account to pay for the property)
It is the first time I consider doing the above, because for the previous purchase down-payment amount was much lower. I am putting much more down now.
(I know I can ask my accountant/lawyer the same questions however a. I find there are cases where invetors provide more relevant info! and b. perhaps other investors here have similar dilemmas and would like to learn more about it too)
THANKS & REGARDS,
Neil