The company got an investment from his personal funds. If you are asking about where he as a person got money, Vegas is legal and likely gives tax receipts.
He took a loan from the company; if he couldn't pay it back then yeah he is in deep trouble but he could.
So you're saying it's only a problem if I lose? Well I like those odds ;)
This actually triggered a random memory of some court-room drama where a quant embezzled a bunch of money to buy lottery tickets though a system he devised, won, and then got charged after paying back the stolen seed money... in hindsight he woulda gotten away with his fictitious crime if he were a CEO or boardmember...
Wait, so which was it – he used $5000 of his own money or the company's?
I'm surprised loaning money from the company is legal in the U.S., it's certainly not here. Probably because then you can fairly easily create a tax evasion scheme where you never pay yourself a salary and just keep borrowing money at zero interest and payment due long about five years after the sun explodes...
I don’t know where “here” is, but in the U.K. it’s perfectly legal. You can even give yourself (as a director) an interest free loan.
However if the amount owed is greater than ~£10k(?) at the end of the corporate tax year, you need to pay it back within 9 months or it’s treated as income and taxed accordingly (there’s also regulations about paying it off before the end of the corporate tax year and taking out directly after). Still 21 months for an interest free loan isn’t bad...
> Probably because then you can fairly easily create a tax evasion scheme where you never pay yourself a salary and just keep borrowing money at zero interest and payment due long about five years after the sun explodes...
It's legal here in the US, but there are rules around minimum interest charges. I dealt with this during a partner buyout - the payment schedule HAD to have interest involved or else it was considered a fishy loan.
I wonder what "here" is, in Canada, generally, when you borrow funds from your company and don't repay it within one year, the CRA can assess the outstanding balance as ordinary income at an income tax rate similar to that of a salary.
He took a loan from the company; if he couldn't pay it back then yeah he is in deep trouble but he could.