What are the tax implications when I lend money to my foreign LLC or make capital contributions?
I'm the sole foreign owner of a U.S. LLC. When I first started the LLC, I transferred $5,000 from my personal account to the LLC's Mercury account to cover initial expenses. I also plan to lend the LLC $20,000 to fund inventory purchases.
What's the difference between a capital contribution and a loan for tax purposes? Does it matter which one I call it? And do I need to report these on Form 5472? Someone told me that capital contributions are reportable transactions but I'm not sure about loans.
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