Hi Mark and Mat
I hope you are doing well
My question is as follows:
Can a S-corp distribution be paid using Bz credit (credit card or business line of credit) or even perosnal CC funds?
Scenario 1:
For example let’s assume I liquidate a credit card A (or use funds from a business line of credit) and then transfer the BALANCE to a newly opened credit card B with 12 months no interest. Then, use those “liquid funds” to pay me an S-corp distribution. Is this possible and what would be the implications in the books in regards to that balance on the credit card B assuming the 0% APR promo balance transfer carries over 2 fiscal years i.e. I applied for CC in May 2022 and promo 0% APR balance ends in May 2023.
Scenario B
Similarly, I can liquidate funds from a personal credit card and take advantage of 0% APR credit card balances event up to 18 to 21 months on the personal side. The concept is to liquidate these funds and generate a LOAN to my S-corp. Then use those funds to pay me a S-corp distribution and with the monthly loan payments from my company to myself (loan pay back with interest) I’ll be able to pay back the credit card balance monthly and (in these 2 scenarios) pay NO tax on this transaction because is all borrowed money.
I thank you in advance for taking my question into consideration
Sincerely,
Andres