| Regarding repayment
What is the name of your state? La.
My question may just be about fairness and what I'm willing to let someone get away with.
I started a business with a partner. We were unable to get a traditional small business loan between the two of us so we decided we would each put up half. I had mine in cash, my partner ended up taking out a home equity loan for her half. Well, it was used as a line of credit for the business with husband, wife and business name on the papers. I've only had to sign at the bank for authorization on the line of credit for some reason. I have no signature on the actual "papers". The bank is calling this "loan" a line of credit with borrowers being partner and husband. Before opening, we both agreed we would not draw a salary until we were making a profit or repay ourselves until then as well. My partner doesn't feel this falls into that category. She feels this is her "out of pocket" contribution and is repaying it from the company itself as a note. Even though we agree no repayment would take place. I have not been taking a repayment on my half. I do know this is unfair but what happens come tax time? We have been paying mortgage interest on this loan from the company. How will this affect the business come tax time? Or will it? Since this is a home equity loan, it will affect her personal taxes as well right? Are there any legal issues here I need to be concerned about or is it all just about being fair on the repayment issue? | 
11-17-2007, 08:55 AM
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