In 2017 we started an LLC and transferred some money from our personal account to the LLC checkings account for initial funding. The LLC is a single-member so we report all income and expenses on our personal tax return. My question is if that transfer of funds qualifies as a deduction in itself?

Where does the money for a LLC come from?

As an entrepreneur or small business owner, you may be wondering about funding your LLC. Funding for an LLC can come from a number of sources, with capital contributions from members being one of the main sources—and often the only source—of funding.

Can a person be a member of a LLC?

There is no restriction on the number of members of an LLC. Members can be both individuals and corporations. When it comes to tax purposes, a single member LLC will have the profits from the company pass through onto their personal tax return.

What happens when you make a capital contribution to a LLC?

Additionally, the capital account should be adjusted to account for any distributions that may be made from the LLC to the members. So, you’ve made your initial capital contribution, but the LLC requires more cash for its daily operations, or perhaps it needs additional funds to make an investment in some necessary equipment.

Is it legal to deposit a personal check into a LLC?

While it’s perfectly legal to deposit a personal check into one of your LLC’s business accounts, there are certain negative results that can arise from doing so. One such result is known as ” piercing the veil ” and can expose you to liability.

What happens if you transfer money from one LLC to another?

You should be deliberate in your transfers. If you get in the habit of moving small amounts of money from one account to the other for no apparent reason you could ” pierce the corporate veil “. That means that the government could decide that you are not operating as a separate entity, and revoke your limited liability protection. +1, Great post.

Is the transfer of funds to a checking account deductible?

Transfer of funds to LLC checking account – tax deductible? In 2017 we started an LLC and transferred some money from our personal account to the LLC checkings account for initial funding. The LLC is a single-member so we report all income and expenses on our personal tax return.