55 votes

Why cannot LLCs be used to negate increased risks when doing leveraged investments?

Answer: Due diligence by the lender. It occasionally happens, and sometimes the lending officer is in on a scam, but banks do not tend to loan money where there is a large chance that they will not ...
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  • 74.9k
54 votes

Why would my job recruiter want me to form an LLC?

Your recruiter is likely trying to avoid having to pay the employer's side of employment taxes, and may even be trying to avoid having to file a 1099 for you by treating your relationship as a vendor/...
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  • 3,795
52 votes

Can I create an LLC to put my assets into it in case I am personally sued

Even if the LLC was safe, that wouldn't help you. If you set up this LLC (and ignoring complications like taxes if the LLC owns your house, you have to pay rent to the LLC for living in it, the LLC ...
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36 votes
Accepted

Is income from a check taxed according to the date written or the date deposited?

If your business operates on a cash basis (and it probably does), then income is governed by a doctrine known as constructive receipt. From IRS Pub 538: Constructive receipt. Income is constructively ...
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32 votes
Accepted

Can I expense when buying my own lunch

It depends. If you’re on a business trip or entertaining a client then yes. However, regular lunches are not deductible on your taxes since it isn’t a business need. As always, when in doubt, work ...
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  • 10.2k
30 votes

Do I have to pay rent to my father when the home is owned by a family LLC I partially own?

Your dad isn't an owner, that is equivalent to any stranger down the street charging you rent for a house your company owns, unless he lives there. If your dad lives there, then he is beholden to the ...
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  • 20.1k
27 votes

Why cannot LLCs be used to negate increased risks when doing leveraged investments?

Alright, so the bank would still, then, agree to lend 10K against the 10K in equity, right? That still significantly increases profits (24% vs 15%) and would afford the same loophole. As a general ...
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  • 20.8k
26 votes

Can I create an LLC to put my assets into it in case I am personally sued

You own the LLC, which could be seized since it's your property (I'm not a lawyer) If you were personally sued then the court would look at your assets - one of which is an LLC with all your money in ...
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  • 3,861
22 votes

Transferring $ from LLC to Personal account

Hoo boy. This is a huge mess. TLDR: There's no tax on the withdrawals (most likely). The bigger issue is paying taxes on the LLC's gains all along. Here's the problem: It's very unclear whose taxes ...
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17 votes
Accepted

Bank claims I'm personally liable for small business fees; despite leaving the company?

What did you sign when the account was opened? What did you sign when you left the company, to transfer those responsibilities? Unless the bank has a record of someone else being responsible, they are ...
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  • 31.8k
16 votes

Why cannot LLCs be used to negate increased risks when doing leveraged investments?

Where your scheme fails is the bankruptcy. It wouldn't work. You'd be personally liable: the shield wouldn't hold You get the loan. When you default on the payments, and certainly the moment ...
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15 votes

Why would my job recruiter want me to form an LLC?

Be careful, this may be disguised employment This sounds very like disguised employment. You act like an employee of the company, but your official relationship with them is as a contractor. You gain ...
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15 votes

How to account for startup costs for an LLC from personal money?

Typically you give a loan to the company from yourself as a private person, and when the company makes money the company pays it back to you. Then the company pays for all the expenses with the money ...
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  • 20.8k
15 votes
Accepted

Transferring $ from LLC to Personal account

My question is, can I get in legal or tax trouble as it is technically "my business" and am "paying" myself? Do I need to claim this or acknowledge it in my own personal taxes? Even though it is ...
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  • 74.9k
14 votes
Accepted

Am I required to file taxes on an LLC that made no money?

LLC doesn't really mean anything to the IRS. Your business filing requirements depend on how your LLC is treated for tax purposes. If you have a single-member LLC, then it's not considered a separate ...
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  • 62.9k
14 votes

Limited company expenses not allowed

A company should always keep accounting books. In most jurisdictions (and I'm guessing the UK is not an exception), keeping books is a legal requirement for a corporation/limited company in order to ...
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  • 127k
13 votes

Do I have to pay rent to my father when the home is owned by a family LLC I partially own?

Could anyone tell me if it is legal for my dad to charge me rent for the property that I am renting? Wouldn't any profit from my rent go to the LLC holders, myself included? Would this differ ...
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12 votes

Bank claims I'm personally liable for small business fees; despite leaving the company?

If I were you, I would go to the bank right now, pay the $100 and close the account. I would stop the bleeding first then consider the fallout later. Do you own the account jointly with your ...
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  • 48.3k
12 votes

Do I have to pay rent to my father when the home is owned by a family LLC I partially own?

Let me take a guess at the arrangement: Your Dad purchased the property. Your Dad, as he is getting old, didn't want his estate to pay taxes on his death, so he gave the property to the LLC which is ...
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  • 566
12 votes

Why cannot LLCs be used to negate increased risks when doing leveraged investments?

I think you simply need to understand credit risk. A newly formed Corporation with zero operational history and a $10,000 bank account is, from a default risk perspective, a suicidal toddler with $10,...
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  • 48.3k
12 votes

Transferring $ from LLC to Personal account

I created an LLC for my Dad's business. He does all of the business but it is in my name using my SSN and all that (long story). He does all the operations and handles the taxes and everything. I ...
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11 votes

Can I create an LLC to put my assets into it in case I am personally sued

It is not a way to protect yourself from a personal judgment. Regardless of whether the assets of the LLC are considered your personal assets, the LLC itself is your personal asset. It is just an ...
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  • 28k
10 votes

How can I invest my personal money in my own Limited company in the UK?

As discussed in the comments, the best approach is to make a loan to the company. Make sure you document the terms of the loan including when it is repayable and any interest due. If you want to be ...
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10 votes

Can the IRS come after a new limited liability company for back taxes?

Yes. If the boss owes the money and the boss owns the LLC, the LLC is part of the boss' assets. They can come after it. LLC protection work up the chain, not down it. Also, this is irrelevant if ...
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  • 524
10 votes

Can I create an LLC to put my assets into it in case I am personally sued

Asset Protection by Adkisson & Riser is really the book to read on this subject. It's one of the few intelligent asset-protection books that isn't out to sell rubbish like Cayman Island trusts ...
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9 votes

Selling units/shares in my startup to my Roth IRA

Since I can't transfer/gift shares directly to my Roth IRA, what's the most tax-efficient way for my Roth IRA to take ownership of as many units of XYZ LP as possible? None. XYZ LP has some ...
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  • 127k
9 votes
Accepted

Can owners of stocks of an incorporated business traded on the stock exhange be liable for company's debts?

As an ordinary shareholder, yes you are protected from recourse by the debtors. The maximum amount you can lose is the amount you spent on the shares. The rules might change if you are an officer of ...
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  • 3,997
9 votes

How to account for startup costs for an LLC from personal money?

You don't even need to formally loan the LLC any money. You pay for the setup costs out of pocket, and then once the LLC is formed, you reimburse yourself (just like with an expense report). ...
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8 votes

Can owners of stocks of an incorporated business traded on the stock exhange be liable for company's debts?

From Wikipedia: If a company with limited liability is sued, then the claimants are suing the company, not its owners or investors. A shareholder in a limited company is not personally liable ...
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  • 1,226
8 votes
Accepted

About opening an LLC with little to report in the beginning

Jon Schaub may have some valid advice, but there seem to be several critical defects with your interpretation of it. You have to post income as income You seem to labor under the impression that ...
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