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    Abba57's Avatar
    Abba57 Posts: 1, Reputation: 1
    New Member
    		  
    #1

    May 24, 2015, 05:21 PM
    Can a c-corp loan money to a LLC then forgive the interest charges
    Our C-corp made a business loan to a LLC. The LLC had difficulties paying the loan and wants to redo the loan without interest.
    jerileycpa's Avatar
    jerileycpa Posts: 27, Reputation: 2
    Certified Public Accountant
    		  
    #2

    Jun 1, 2015, 04:04 PM
    Legally, I believe that yes, your C-corp can forgive the interest receivable and renegotiate the terms of the existing debt. However, from a tax perspective (meaning can you deduct the bad debt on the business tax return) if the LLC is a related party, then you may not be able to take a tax deduction. Additional information would be required.
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