LLC C-corp in US, how to report my own investment


1

I'm a single member LLC with C-corp taxes in the US, and I just started my entity in January. I'm trying to figure out how/if I report my own capital injections for expenses as regards my taxes. I don't expect that I will have revenue this year at all, but I do expect to move ~$500-$1000 from my personal bank account into the business bank account I have already set up.

Is it enough to simply track the movement of money in my ledgers if the IRS comes asking about it? I don't want to get into hot water with the government right off the bat, and I want to make sure I get in the habit of filing properly.

I've seen reference on this site to structuring the investment as a "loan," but I'm not particularly interested in doing so. I'm more concerned with any potential tax liability on the LLC itself for the time being.

Thank you for any help.

LLC Tax Investment USA

asked Apr 12 '13 at 16:29
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User25852
8 points

1 Answer


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I'm a single member LLC with C-corp taxes in the US

I really hope that you had a very good reason to do this to yourself. I wrote this before reading all the rest of the question.

I don't expect that I will have revenue this year at all, but I do
expect to move ~$500-$1000 from my personal bank account into the
business bank account I have already set up.

That adds to your basis in the stocks you own. This is your equity.

Is it enough to simply track the movement of money in my ledgers if
the IRS comes asking about it?

No. Keep the copies of the checks, or cross-reference the bank transfers on the relevant statements and keep those. Your own records are not enough, you need bank records to support your claims. I think it will be easiest to write a check to the corporation from your personal account, and keep the copy of the cashed check, but verify this with your accountant.

I don't want to get into hot water with the government right off the
bat, and I want to make sure I get in the habit of filing properly.

Very good. Now go to a CPA and get him explain you everything in details. Do not do things on your own before you have full and complete understanding of all the consequences.

I've seen reference on this site to structuring the investment as a
"loan," but I'm not particularly interested in doing so. I'm more
concerned with any potential tax liability on the LLC itself for the
time being.

Never do things just because someone suggested this on the Internet. Have your own professional (CPA or attorney, or both, depending on the matter) advise you. The advice depends greatly on the facts and circumstances that differ and vary wildly, and you never know why what has been a good idea for some, may be disastrous for you.
answered Apr 12 '13 at 16:38
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Littleadv
5,090 points
  • Thanks for your answer. – User25852 7 years ago

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