da12ho2
Jun 28, 2007, 10:55 AM
:confused: Explain how the federal income tax structure impacts a business decision to finance with use of debt vs. equity. :confused:
delite
Jun 29, 2007, 10:51 AM
:confused: Explain how the federal income tax structure impacts a business decision to finance with use of debt vs. equity. :confused:
If the debt exceeds an acceptable ratio as oultined in IRS regs. Excess debt can be converted by the IRS to contribution of capital. Result is dental of a deduction for the interest on debt. Rule of thumb for debt:capital is 3:1.