The funds would be given to the LLC in hopes to gain money or later join with the company. Would this money need to be taxed, and when? If possible supply a link with related information other than the broad link of irs.gov. Thankyou.
2007-08-10 06:58:27 · 5 answers · asked by Danokazaki 1 in Business & Finance ➔ Personal Finance
From what you have described, you are no longer a single member LLC. As such, the single member may in fact see tax differences. There is an IRS ruling that single member LLC's are to be treated as proprietorships and otherwise as partnerships. If a single member LLC is paid a fair salary, earnings in excess of that salary ARE NOT subject to Social Security or Medicare taxes. Multiple member LLC' are fully subject to Social Security and Medicare, regardless of salary.
This question is too vague, however. The only competent person to answer this is either a public accountant or an enrolled agent with all the details in front of them. If you handle capital transactions incorrectly you can blow your LLC status with the IRS. To be an LLC, for tax purposes you must meet certain guidelines and continously do so, otherwise you will be subject to double taxation as a C corporation.
2007-08-10 07:26:52 · answer #1 · answered by OPM 7 · 0⤊ 0⤋
The question is a bit vague but you are investing in a single member LLC as an investor which makes it no longer a single member LLC. The funds you invest have already been taxed so there is no tax on the investment. Your partner in the LLC is giving up a share of the LLC to you and depending upon whether he is taking money out of not would determine if he has a tax issue. On your side, the earning of the LLC will be taxable to you annually and you will receive a K1 for your percentage of the LLC's income (based upon your ownership). I don't think Nevada has a state income tax but the LLC is taxable for both state and federal taxes if there are state taxes.
2007-08-10 07:59:23 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I'm pretty sure Nevada has no personal tax. Since a single-member LLC just flows into your taxes, I don't think corporate taxing would be involved. Now, when you put money into your LLC, it's considered lending to the business. Loan money isn't taxed. Only what you earn on that money can be.
Remember, there's still FICA, Medicare, Federal taxes, and possibly county taxes.
Also remember that, while I myself have some single-member LLCs, mine are in Indiana... so my advice is worth exactly what you paid for it.
This might be a question for your attorney and/or accountant.
2007-08-10 07:06:17 · answer #3 · answered by wood_vulture 4 · 0⤊ 0⤋
you're able to make investments tax-loose in IRA's and 401k's. Forming a business enterprise in a foreign places u . s . won't paintings legally. As a U.S. citizen, you would be charged tax on your foreign places shares. additionally, foreigners making an investment interior the U.S. do ought to pay taxes. the guidelines are complicated.
2016-10-14 21:20:09 · answer #4 · answered by ? 4 · 0⤊ 0⤋
it's cash on the debit side and owners equity on the credit side. That person invested money in your business. It's an Equity transaction - it's not a sale - you need to talk to an accountant so you don't screw things up and have this investor sue you
2007-08-10 07:04:51 · answer #5 · answered by Anonymous · 0⤊ 0⤋