Covington, OH 45318 · Member since 2018 · 1 post · 1 vote
I just took a draw from my primary residence's HELOC and immediately deposited the funds directly into my business LLC checking account so that I could make a large contractor payment. Now I need to start monthly repayments on the HELOC. Today I paid the first payment from my business checking account. I know that I don't want to mix personal with business finances. Can I set up some sort of agreement or promissory note that formalizes this properly? Other ideas on how to account for the funds and repayment?
Rental Property Investor · Philadelphia, PA · Member since 2021 · 774 posts · 500 votes
4y
Beckie - You can ask your CPA for his/her suggestion, but I think the biggest item is to track your payments (from LLC to personal) on an excel file and make note at the end of the year of the interest versus principle paid on the HELOC (which the bank should give you during year end statements) - in that way, you may be able to write off some of the interest. However, in this case the deductions may be more limited because of taking a HELOC in your personal name instead of the LLC. Good Luck!