Loan the money in, it's easier to get it back out (the corporation repays the loan) and you can recognize a loss more easily. Setting a term, a reasonable inter

Loan the money in, it's easier to get it back out (the corporation repays the loan) and you can recognize a loss more easily. Setting a term, a reasonable interest rate, and specifying that you will get a single balloon payment at the end of the term is an easy way to go. Put this into the minutes of a board meeting and get a signed document from all board members (if only yourself). You should only put money in that you need for operations, any early salary to yourself is better paid directly out of savings (value is recognized in the "sweat equity" you have from the startup and avoids taxes on roundtrip into and out of the Sub-S as wages/dividends). Happy to chat, my contact info is in my profile; I am not a lawyer or a CPA (both of whom you should already have if you are incorporated) but we've helped a number of early stage software firms with formation strategy issues like these.