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I have a full-time JOB and a side LLC for consulting. Can I invest the net income of my LLC consulting to stock or other businesses and deduct the income?

Forum|Forum|3 years ago
December 16, 2022
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Best answer by VolvoGirl

Is the LLC a Single Member LLC that you are reporting on Schedule C in your personal return? Or is it an S corp? You can invest or do whatever you want with the Net Profit. But that won't reduce the Net Profit on Schedule C. You can only deduct actual business expenses. You have to pay self employment tax on the net income in addition to your regular income tax on it. Sorry.

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Anonymous_

Employee

Exactly what are you trying to accomplish? You cannot deduct income.

Critter-3

What you do with the taxable profits from the business is immaterial. You cannot "bury" them into other things to avoid taxes ... that is frowned upon.

VolvoGirlAnswer

Employee

Is the LLC a Single Member LLC that you are reporting on Schedule C in your personal return? Or is it an S corp? You can invest or do whatever you want with the Net Profit. But that won't reduce the Net Profit on Schedule C. You can only deduct actual business expenses. You have to pay self employment tax on the net income in addition to your regular income tax on it. Sorry.

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alikhod83Author

Lots of companies reinvest the income of the business into another investment to expand their business like if you have one store, you would buy another store and use the second store purchase against your net profit. I was wondering if the business owner could invest in another business to expand the business... let's say an store owner purchases a rental property under the same business name

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Anonymous_

Employee

@alikhod83 wrote:

..let's say an store owner purchases a rental property under the same business name

There would be absolutely nothing wrong with doing so, but the store owner could not deduct the entire purchase price of the rental property from current store income (although, depreciation deductions could be taken for the cost basis of the rental property).