taking money from an s-corp to an disregarded entity llc

Tax, SDIRAs & Cost Segregation
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taking money from an s-corp to an disregarded entity llc

Char Bacheh
Member since 2019 · 20 posts · 0 votes

i made around 8k on my s-corp and i took that money out and put it into my llc how would i have to report it?

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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    7y
    Originally posted by @Char Bacheh:

    i made around 8k on my s-corp and i took that money out and put it into my llc how would i have to report it?

    Generally,

    Distribution to yourself on your Corp’s books. Decrease cash, increase your distribution. 

    Contribution from you on your LLC's books. Increase cash, increase your capital account.

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  • Char Bacheh
    OP
    Member since 2019 · 20 posts · 0 votes
    7y

    is there a way to i can put it on sch k-1 and not pay taxes?

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  • Eamonn McElroy
    Accountant · Atlanta, GA · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    @Char Bacheh

    If you deduct it on your S Corp return (1120S), wouldn't logic then dictate that it would be income on your Schedule C/E?

    It's zero sum, maybe worse if it ends up on the Schedule C subject to 100% self-employment taxes.

    What @Ashish Acharya described is generally the way to go about it.

    If you have $8k net taxable income in your S Corp there's a very strong argument to be made that you shouldn't be an S Corp yet for tax purposes.  Are you running payroll and fairly compensating all owner-employees for their time as required?

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