CPA in the house? Quick question...

[Bryan Snyder]

If you have your properties in a LLC and have separate business accounts are you only taxed on money you take out (salary) from the LLC? If there is extra cash that I could be pulling out as salary but don't and it stays in the business account just building what are my tax implications?

[Account Closed]

I would need more information. An LLC is treated several different ways fo rtax purposes.

Is this a single member LLC. If so the business is treated as a sole prop for tax purposes.

Is it a multi-member LLC. If so it would be treated as a partnership.

You can also elect to the LLC to be treated as a corporation.

You will be required to pay a reasonable salary if you elect to be treated as a corporation. If you do not elect to be an S-corp then the corporation will be taxed and you as an individual would only be taxed on the salary and dividends that you pull out. All other entities are pass through entities and you will pay tax passed on your share of total income and expenses.

So if you leave cash in the business, generally speaking it will be taxed. A C-corporation will allow some cash build up (several hundred thousand) before an accumulation tax is assessed.