1. Would you answer in above question be different if the shareholder had also lent the subchapter S corporation cash in an amount in excess of the shareholders’ allocable share of losses and deductions, and if so how?
2. A client of yours has been advised to have his wholly owned corporation borrow funds from a third party with the loans guaranteed by the shareholder, rather than have the shareholder borrow the funds and loan it to the corporation. Do you agree?