Hi all. I have a question about an investment property owned in an S-Corp (bad, I know), any help would be greatly appreciated:
Building is owned by an S corp with a single member. The building is about to be refinanced now, and there will be a nice amount of loan proceeds left over in the S corp account after the old loan is paid off.
He is being told that if he takes any of the loan proceeds out of the account (obviously for purposes other than the S corp's expenses), he will have to pay taxes on this amount. Is this true? He has to pay taxes on borrowed money? Is there no way around it?
Compared to an LLC where members can pull out loan proceeds with zero tax consequences, this sounds terrible. Any solutions?