USA Below-Market Loans


Joined
Jul 26, 2013
Messages
1
Reaction score
0
I have loan of $500k from a firm to one of the firms officers. The loan is a zero interest loan to be repaid in ten years. All my research merely returns references to "below market loans" as it relates to the tax accounting. Is the financial statement treatment any difference than a regular receivable, or would the aforementioned "below market loan" accounting apply?

Thanks,
Nathaniel
 
Ad

Advertisements

kirby

VIP Member
Joined
May 12, 2011
Messages
2,380
Reaction score
325
Country
United States
There is an economic cost to the firm for making this loan and it needs to be recorded for financial accounting books as well as tax books. So imputed interest must be calculated and recorded following the below market concept.
And for taxes if the firm has interest expense then you need to include the same amount on the borrowers w2 as income.
 
Last edited:

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top