Can I deduct money I contribute to my LLC on my personal taxes and have the LLC pay taxes on it?

by William R. Lazor, CPA | Jun 05, 2018
askacpaicon

I just founded an LLC for buying and renting out properties. I want to bring $40,000 from my personal checking account to the business account to purchase a rental property. At the end of the year, can I deduct $40,000 from my personal taxes and have the business pay taxes on it?

No. The contribution of capital to the LLC does not create income or expense. It is an equity (ownership) transaction between the owner and the LLC.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: William R. Lazor, CPA, is a partner/shareholder with Kronick Kalada Berdy & Company PC in Kingston, Pa.

Disclaimer
The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
Financial FAQs

Search the most frequently asked finance and accounting questions and read the responses from PICPA members. Always consult a CPA before taking action.

Search