
The Debt vs. Equity Trap: Funding Your US Corp Without IRS Red Flags
If you’re an international founder establishing a US corporation be it a C-Corp or S-Corp you’ve likely already made one critical, early decision: how to capitalize your venture. More often than not, the founder or the foreign parent entity provides the initial money. It’s common practice to label this money transfer a “loan.” After all, you expect to be repaid, right? But here’s a crucial warning from our years of experience in US tax planning: The IRS is highly suspicious