C Corp Officer gets loan for business?

Technical topics regarding tax preparation.
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taxcpa  
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Over the years I have seen a number of incidences where an officer of a C Corp borrows money and holds title to properlty used in the corporation. This seems to be common for vehicles.

In the current instance, the offficer (80% owner) has asked what the consequences would be prior to acting. I know, thats a fantasy, but real in this case.

Business is custom homes. Owner believes he can get a better deal on financing if he holds title personally and borrows money using the property as collaeteral. He wants to use this plan to build a spec home accounted for in the corporation.

What are the hazards here? What agreements should be in place betweeen him and the C Corp to ensure that this would be recognized as a legitimate corporate deal, as opposed to a personal transaction?
 

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