Level 3

distributing funds from one comany to another

Forum|Forum|2 years ago
March 6, 2024
16 replies
45 views

My client took funds from his company to start an LLC for the purpose of buying an renting property.

how do reflect that in the company's 1120S

abctax55

Level 15

Distribution (as you said) from S to shareholder.

'Contribution' to the LLC (is it a SMLLC?)

HumanKind... Be Both

C

CL44Author

Level 3

yes

abctax55

Level 15

OK... then no f.1065 needed

HumanKind... Be Both

T

TaxGuyBill

The individual client owns the LLC/rental, not the S-corporation, right?

You treat it like any other time when the client takes money out of the corporation for his personal use. They could be buying a bunch of donuts, buying a rental property, or going on vacation. Withdrawal for personal use is treated the same: (1) Wages, (2) Distributions or (3) Loan to shareholder.

C

CL44Author

Level 3

thank you tax guy. I was just trying to figure out where to reflect it on the 1120s

OK here is the question. Mabe you can help me (Instead of telling me I should know this) this year he has a net income of 565,000 (line 22) but took 465,000 as a distribution I was trying to figure out how to reflect if on the 1120s (reduce line 22) so he wouldn't have to pay taxes on it. right now I am not sure and I would appreciate your help.

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