Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
The portable alarm (lasershield) that I use is billed to my personal credit card. The alarm was in a house that I own in an LLC for a few months while the house was vacant.
In order to avoid co-mingling, do I need to do an expense report for the time period/monetary amount that the alarm was used at the LLC'd property? This is kind of a gray area because the alarm is also used at houses that I own in my own name when they're vacant. I currently own one house in an LLC and the rest are still in my name. Thanks.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
13y
Originally posted by Bienes Raices:
Thanks--I didn't mean for taxes--I didn't claim this as a deduction. l mean could this cause a potential legal problem with the corporate veil by doing it this way (paying for the use of the alarm on the LLC property with my personal credit card).
Yes, it could as anything is possible and you are comingling funds. To prevent this, expense it and reimburse yourself showing a paper trail. From now on, pay the expense with LLC funds.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
13y
Tough question and you should likley consult your CPA, however, i would suggest (and confirm with your CPA as I am not one) that the unit be paid for via a check from your LLC to you as a reimbursement of costs and then used for all of your vacant homes. If you happen to use it for a while in one home you own in your personal name, there is not any IRS police that will be checking your other homes for that item - you are fine there.
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
13y
If your LLC taxation is "pass through" then your net tax due will probably not be affected whichever approach you take IMO. What is right or wrong to do - that is another matter. Do you own some tools of your own, like a hammer or screwdriver, that you sometimes use to repairs something for the LLC, and if so, how do you handle those tool costs? The main difference is that this alarm has a subscription attached to it, in the form of the monthly fee ...
Now, the reason to do this the "right" (meaning proper) way is that you are putting a rental into service, so that those costs you incur in getting it ready are added to basis and they get depreciated - therefore those costs should not be taken as a straight expense deduction.
Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
13y
Thanks--I didn't mean for taxes--I didn't claim this as a deduction. l mean could this cause a potential legal problem with the corporate veil by doing it this way (paying for the use of the alarm on the LLC property with my personal credit card).
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
13y
Originally posted by Bienes Raices:
Thanks--I didn't mean for taxes--I didn't claim this as a deduction. l mean could this cause a potential legal problem with the corporate veil by doing it this way (paying for the use of the alarm on the LLC property with my personal credit card).
Yes, it could as anything is possible and you are comingling funds. To prevent this, expense it and reimburse yourself showing a paper trail. From now on, pay the expense with LLC funds.
Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
13y
Originally posted by Will Barnard:
Originally posted by Bienes Raices:
Thanks--I didn't mean for taxes--I didn't claim this as a deduction. l mean could this cause a potential legal problem with the corporate veil by doing it this way (paying for the use of the alarm on the LLC property with my personal credit card).
Yes, it could as anything is possible and you are comingling funds. To prevent this, expense it and reimburse yourself showing a paper trail. From now on, pay the expense with LLC funds.