Juan is the 100% owner of a C-Corporation that is valued at $1,000,000. However, because of the pandemic, it is cash poor and can’t meet its payroll obligations. Juan has the $100,000 in cash that he can put into the corporation to meet its needs. The business consistently reports annual income of $350,000 per year and has done so for at least 10 years. The corporation does not owe anything on its property that is valued at $120,000. Someone told him that he might be better off to loan the money to the corporation rather than exchanging the money for additional shares in the corporation. He wants to know what you, his CPA thinks about this and what he needs to do. Advise him.
