S Corp Basis - Credit Cards - Spidell

S Corp Basis – Credit Cards

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Message Board S Corp Basis – Credit Cards

This topic contains 2 replies, has 2 voices, and was last updated by Dave Yoshida 3 weeks, 2 days ago.

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  • #180476

    If a shareholder of an S Corporation uses a credit card that is only in their name only for business purposes and records the credit card as a liability on the company’s books, would this count towards basis like a shareholder loan?


  • #182496

    Any thoughts on this?

  • #182633
    Dave Yoshida

    It seems to depend, to me. So, in my s-corporation, I have a credit card that is really my own, personal card that I use exclusively for business purposes. All of the expenses are business expenses, they appear as a liability on my business’s books, and I pay the bill each month out of my business bank account with business funds. The fact that the card is only in my name is, in my opinion and in my history of use, a formality.

    If, however, my intent were to be repaid for the purchases I made on behalf of the corporation with my personal funds (so, my personal credit card) then to the extent I am lending my own money to the corporation, I am building debt basis.

    And, when the business either pays the bill for me, or pays me back, then I am un-building that same basis.

    That’s what makes sense to me…