How to use personal funds to invest using a corporation?

2 Replies

Hi,

I have some personal savings and would like to use those to invest in real estate. But instead of investing in my personal name (for obvious reasons), I would like to use a S-corporation that I have formed to do the investing.

My question is - how do I fund the corporation with my personal savings? What I mean to ask is, if I have $25,000 of personal savings available to invest and a XYZ corporation formed, can I just deposit these personal savings into the corporation bank account and begin investing and taking title as XYZ Inc? Is this called co-mingling of personal and corportion funds, and can result in the liability protection not holding up? Any advice on how to go about using personal savings to invest in real estate via a corporation is appreciated. Thanks for your help.

- Andy.

I have this too with newly formed llc.. What is best way with taxes? 

That is basically what you do.  You write a personal check to the entity.  The entity then deposits the check in their account and can now use that money for business purposes.  The money you gave to the entity is classified as a capital contribution.  Later, down the road when you take money out of the entity as a distribution, you will first draw against your previous capital contributions before you have to start paying taxes on your withdrawls as income.

Make sure to consult with your accountant so that your capital contributions are properly accounted for.

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