I have a good question about managing expenses when buying real estate? Can you help me with this one ?

Question

I purchased my first commerical property and i want to track my expenses inside a LLC, so the losses for this LLC will offset some of my other income from my other business when tax time comes on my persona return. But here is the catch.. They escrow compnay will only accpet the downpayment from my personlal account, i cannot transfer cash into the LLC and pay them with a company check. ?

Also in the future, if the company was able to cut a check from a down payment, is this considered a company expense. what would i consider this check in quickbooks ?

Answer 1

Sounds like you really should speak to an accountant.

Beautiful thing is that you can pay tha accountant out of the LLC and claim it as an expense on the taxes for the LLC

Answer 2

From the tax standpoint, an LLC is a disregarded entity so it's irrelevant where the funds come from. As far as the IRS is concerned, it's all your personal funds anyway.

I've never known an escrow company that would accept a downpayment from a personal checking account. They all want certified funds or a bank draft. Just bring a cashier's check to the closing and you'll be fine.

The downpayment is part of the purchase price. It is NOT an expense; it's part of your capital investment.