Start-up capital deduction?

Question

Hey everyone! Been a while since I was on. I want to know what to expect come tax time. I started my L.L.C., and have a business checking account for it. For the entire year of 2009, I have been and will continue to put a monthly allotment of my personal money into the biz account. When I file my return this February, will that be tax deductible? I am sure they can tell me at H&R Block, but I like to know things ahead of time. I appreciate any responses!

Claude Hodge

Jon Holdman · Answer

If I understand correctly, you're talking about money you're moving from a personal account into your LLC business account. That won't show up on your taxes at all. Money the LLC actually spends will become a deduction. LLCs are pass through entities for tax purposes. Their expenses and income move to your personal return. So, moving money between the LLC's checking account and your personal checking account is irrelevent for tax purposes.

I'd find a real CPA, not just an H&R block tax preparer. You need real advice and guidance, not just someone to fill in the blanks. Find a CPA who invests in real estate, or who has clients who invest in real estate.

I'd find a real CPA, not just an H&R block tax preparer.  You need real advice and guidance, not just someone to fill in the blanks.  Find a CPA who invests in real estate, or who has clients who invest in real estate.

Claude Hodge · Answer

Thanks for the response fellas.  I have not done any business yet with the L.L.C., so I am good there.  I did plan on talking to a CPA once I am fully in the swing of things.  I think I have a handle on it for now though.  Thanks again!

Claude Hodge

Brian Haskins · Answer

You need to get tax advice from an accountant. I would think though that it would be a write off though.

Brian Hakins

Dave Toelkes · Answer

Brian,

LLCs don't issue stock, LLCs have members not shareholders.

Brian Levredge · Answer

Jon is right.  How that money is treated depends on how you choose to label the transfers.  If you haven't done any actual business with the LLC, then you might want to consider calling the money you've put into the account a loan that is payable back to you at a reasonable interest rate.  Either that, or stock purchases.  You need to be careful about putting your own money in every month because that could be seen as comingling and that would pierce your corporate veil.

Start-up capital deduction?

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