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Updated about 13 years ago on . Most recent reply presented by

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Bienes Raices
  • from Orlando, Florida
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Bienes Raices
  • from Orlando, Florida
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Bienes Raices
  • Orlando, FL
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Tax, SDIRAs & Cost Segregation

Making a loan to an LLC

Bienes Raices
  • Orlando, FL
Posted

What would be the rationale for making a loan with a promissary note from your personal name to your LLC instead of just making a capital contribution? Is there some tax advantage to doing that? It seems simpler to just make a contribution.

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  • from Portland, OR
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Jeff S.
  • Specialist
  • Portland, OR
Replied

It all boils down to being in court. Making a loan is just an extra safe practice that may or may not make a difference. My attorney also advised against having a loan with a due on sale clause. If you are a single member it has less consequence than having multiple members. An attorney on here stated with a single member LLC you could move money in and out without any fanfare.

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