TxQ

Does it make any difference who owns more (% wise) of each business (as far as the classification goes?)Husband owns 51% of C Corp and wife owns 51% of LLC.

Obviously I'm not very knowledgable at all in this area, that's why i'm here asking questions of the experts. However, I think the answer is that because we are in Texas, even though it is owned by husband and wife, it is a single member entity and is treated as a disregarded entity by the IRS.

The CPAs who were asked were aware of the details - I didn't ask them to guess. The C corp is owned by husband and wife. The LLC is also owned by the same two. The C Corp is a contracting business and the LLC is a property management company. The loan was from the C corp to the LLC for operating expenses for the LLC. The C corp had some extra income and the LLC needed operating capital. The loan is for 10 years and the interest rate is 6%.

If a business loan is made from a C Corp to an LLC, how is that treated tax-wise for each? There is common ownership between the companies. There is a loan agreement with interest charged and monthly payments are made from the LLC to the CCorp. I've gotten different answers from different CPAs. Thanks for any advice.