LLC1 is a US company that realizes a capital gain of $20k after the sale of personal property in the US. LLC1 makes a business/intercompany loan to LLC2 (a non-US company for tax purposes) for $5k in the same year.
1) Can LLC1 deduct the $5k loan (or business expense) from the $20k gain which results in being taxed on only $15k gain?
2) Are there any issues with LLC1 making a business loan to LLC2 - a non-US company? LLC1 and LLC2 are affiliate companies i.e. same owner.
1) Can LLC1 deduct the $5k loan (or business expense) from the $20k gain which results in being taxed on only $15k gain?
2) Are there any issues with LLC1 making a business loan to LLC2 - a non-US company? LLC1 and LLC2 are affiliate companies i.e. same owner.