Tax implications of using Infinite Banking to fund real estate

[Paul Beets]

Greetings BP:

I'm looking for a tax expert that is extremely familiar with the tax implications of using the infinite banking concept (Nelson Nash). Specifically how to take a loan from a policy to loan to my LLC and then pay the loan back tax free.

Some specifics:

I took a $17,000 loan from my IBC policy. I then loaned that money to my LLC which is using it to rehab my rental property in Indianapolis. I'm considering creating a promissory note with terms and conditions for the LLC to pay me back using the cash flow from the property once it is rented.

My tax adviser has some concerns about that payback money becoming income and therefore offsetting the whole plan to contribute to my IBC policy tax free so that it can continue to grow tax free.

Has anyone done this?   

Thanks!

Paul