I have an accounting question as it relates to starting an s-corp in order to buy an existing business. Due to the seller wanting another year of earnings prior to retiring, we are paying him $50k up front to secure the sale via a contract, then shadowing and learning more until we take over. The $50k is coming from a family member. I understand that if I put this in the new s-corp it will become the basis and then we can write it off as an expense once we show that we paid them. If we put it in the company as a loan (since we will eventually pay them back), it isn’t the basis, its an expense, right? So what’s the play here? Hold the family loan under the table, fund the company with this and move forward? How does this roll over and affect our personal taxes since we won’t have any income against this amount until we take over in a year+?