The U.S. IRS has released an international practice unit on Valid Shareholder Debt Owed by S Corporation. The practice unit addresses what qualifies as bona fide debt and whether that debt is owed directly to the shareholder creating debt basis with respect to whether a loan increases a shareholder’s debt basis.
International practice units are developed by the Large Business and International Division of the IRS to provide staff with explanations of general international tax concepts as we…