Loans from Shareholders The income tax effect of imputing interest on loans from shareholders may not appear to be as detrimental as that resulting from loans to shareholders (which can result in taxable income at the corporate and shareholder level with no offsetting deductions). Consequently, it’s prudent for them to know, in advance of deciding to take an ownership stake in their companies, how the Internal Revenue Service and the courts look at worthless loans. Let’s say a shareholder-employee made the loan or guaranty as an employee in order to protect her job. In that case, the loss qualifies as a business bad. The mis-assignment as shareholder loan did not affect equity but created a false liability, actually lowering your balance sheet values If you started your business with $10,000 cash from personal funds you record as Member Contribution and your Equity is $10,000.
| Instructions: | More Information: |
Each month, the IRS provides various prescribed rates for federal income tax purposes. These rates, known as Applicable Federal Rates (or AFRs), are regularly published as revenue rulings.
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| RR-2021-04 -- APPLICABLE FEDERAL RATES | FEB. 2021 |
| RR-2021-01 -- APPLICABLE FEDERAL RATES | JAN. 2021 |
| RR-2020-26 -- APPLICABLE FEDERAL RATES | DEC. 2020 |
| RR-2020-22 -- APPLICABLE FEDERAL RATES | NOV. 2020 |
| RR-2020-20 -- APPLICABLE FEDERAL RATES | OCT. 2020 |
| RR-2020-16 -- APPLICABLE FEDERAL RATES | SEPT. 2020 |
| RR-2020-15 -- APPLICABLE FEDERAL RATES | AUG. 2020 |
| RR-2020-14 -- APPLICABLE FEDERAL RATES | JULY 2020 |
| RR-2020-12 -- APPLICABLE FEDERAL RATES | JUNE 2020 |
| RR-2020-11 -- APPLICABLE FEDERAL RATES | MAY 2020 |
| RR-2020-09 -- APPLICABLE FEDERAL RATES | APR. 2020 |
| RR-2020-06 -- APPLICABLE FEDERAL RATES | MAR. 2020 |
| RR-2020-03 -- APPLICABLE FEDERAL RATES | FEB. 2020 |
| RR-2020-01 -- APPLICABLE FEDERAL RATES | JAN. 2020 |
| RR-2019-26 -- APPLICABLE FEDERAL RATES | DEC. 2019 |
| RR-2019-25 -- APPLICABLE FEDERAL RATES | NOV. 2019 |
| RR-2019-23 -- APPLICABLE FEDERAL RATES | OCT. 2019 |
| RR-2019-20 -- APPLICABLE FEDERAL RATES | SEPT. 2019 |
| RR-2019-17 -- APPLICABLE FEDERAL RATES | AUG. 2019 |
| RR-2019-16 -- APPLICABLE FEDERAL RATES | JULY 2019 |
| RR-2019-14 -- APPLICABLE FEDERAL RATES | JUNE 2019 |
| RR-2019-12 - APPLICABLE FEDERAL RATES | May 2019 |
| RR-2019-08 -- APPLICABLE FEDERAL RATES | APR. 2019 |
| RR-2019-07 -- APPLICABLE FEDERAL RATES | MAR. 2019 |
| RR-2019-04 -- APPLICABLE FEDERAL RATES | FEB. 2019 |