USA Offseting Deductions


Joined
Mar 3, 2021
Messages
4
Reaction score
0
Country
United States
LLC1 is a US company that realizes a capital gain of $20k after the sale of personal property in the US. LLC1 makes a business/intercompany loan to LLC2 (a non-US company for tax purposes) for $5k in the same year.

1) Can LLC1 deduct the $5k loan (or business expense) from the $20k gain which results in being taxed on only $15k gain?

2) Are there any issues with LLC1 making a business loan to LLC2 - a non-US company? LLC1 and LLC2 are affiliate companies i.e. same owner.
 
Ad

Advertisements

Joined
Dec 19, 2020
Messages
63
Reaction score
5
Country
United States
1) No - loans are loans - not business expenses
2) No issues - but there should be documentation for both entities of the terms of the loans, purpose for which made and all other pertinent facts to document the transaction.
 
Ad

Advertisements

Joined
Mar 3, 2021
Messages
4
Reaction score
0
Country
United States
Any suggestions on how to reduce the capita gains earned by a balancing deduction?
 

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