Question

Transferring money from Personal Account to Business Account Via business equity

Forum|Forum|3 years ago
July 26, 2022
1 reply
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Hello everyone, I was not sure where to post this question. I own a single-member LLC, and it's doing decently well, but I would like to transfer money from my personal checking account to my business checking account and claim it as equity. The reason for doing this is that I would like to buy a camera in the future for my business and claim it as a business expense, but I don't have enough money from my business to purchase the camera in full. The first question is, would this pierce my Piercing the corporate veil by transferring the money with QuickBooks and then using it? Second question: Could I use part of the personal money I put into the business account and a portion of my business profits to buy the camera and then write off part of the camera on my taxes at the end of the year? Thank you

Critter-3

Ok ... did you actually incorporate the SM LLC ? If so you are not "piercing" anything ... you are making a loan from shareholder which is reflected in your books. And no matter how you pay for the asset it is deductible on the corp return.

Z

ZachVAuthor

I see what you are saying. No, I did not incorporate it. It's just a dis-regarded entity; it's neither a C-corp nor S-corp. Basically, I want to make sure that I transfer money from my personal account to my business account without mixing the two and losing the protection an LLC offers but now that you mentioned this, I realize that dis-regarded entities don't offer much protection until you become incorporated.

Critter-3

Sadly you have no real protection with a state issued "LLC" ... for federal reasons your SMLLC is a disreguarded entity for income tax purposes so if you want to move money from one pocket of your personal pair of pants to the other pocket there are no restrictions. If you are using QB to keep your books it is simply counted as a loan from owner/shareholder even if you are not incorporated. And FYI ... the LLC veil is paper thin and a first year law student can pierce it easily ... your only real protection is a good liability policy. If you really want protection you should incorportate... talk to a local business attorney to be better educated.