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Question
Can my S-corp Learn myself money temporarily, without it being a taxable event?
Answer

Absolutely! This would be recorded as a “Shareholder Loan” on the S Corp’s balance sheet, and it would not trigger a taxable event. However, it must be treated like an actual loan. The money will need to be paid back to the company within a reasonable timeframe, and adequate interest should be assessed annually. To determine the proper interest rate, reference the IRS’s  page.
Interest will be treated as income on the S Corp’s tax return.

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Sarah York, EA

Sarah is a staff writer at Keeper Tax and has her Enrolled Agent license with the IRS. Her work has been featured in Business Insider, Money Under 30, Best Life, GOBankingRates, and Shopify. She has nearly a decade of public accounting experience, and has worked with clients in a wide range of industries, including oil and gas, manufacturing, real estate, wholesale and retail, finance, and ecommerce. Sarah has extensive experience offering strategic tax planning at the state and federal level. During her time in industry, she handled tax returns for C Corps, S corps, partnerships, nonprofits, and sole proprietorships. Sarah is a member of the National Association of Enrolled Agents (NAEA) and maintains her continuing education requirements by completing over 30 hours of tax training every year. In her spare time, she is a devoted cat mom and enjoys hiking, baking, and overwatering her houseplants.

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