Paying One LLC From Another LLC
Hello,
My husband and I both are the sole owners of two LLC's...one being a Construction Company which he runs, the other being a Real Estate Investment Company which I mostly handle. If I buy a property and have it fixed up by his company...does anyone know if one LLC can pay another?
Thanks!
yes they can. It would be no different that any two companies paying each other. I am not sure you would want to do this, as the one company would have to claim the repair money as income immediately, while the other would depreciate the cost over time. Also, be very carefull with how you handle money, if you wrtie a check from the companies account for personal expenses, you could be failing the "alter ego" requirement which would render your LLC useless. Also, if you were to be sued for something, and the person's attorney could figure out a way to sue both you and your company, you would have to have two seperate lawyers, otherwise, this would again fail the alter ego requirement. Good luck and happy investing.
Absolutely, otherwise Exxon couldn't buy it's corporate jet from Gulfstream. Unless things have changed it's to your advantage tax wise to hold the business and the property it's on in two different companies. One's expense is the other's income.
If his company owns the land it's on then he should lease the land and building from you. You'll save more than enough to make it worthwhile. I remember reading this in a book and the couple save several thousand dollars a year.
Thank you very much!
I am very much so a novice and totally lost when it comes to #'s and taxes...what exactly do you mean when you say "depreciate the cost?" Let's say I buy a property for 30K. I then fix it up and pay my husband for doing the reparis. I then sell it for 60K and claim the 10K+ that I had to pay my husband for a loss. Wouldn't that be to my benefit?
Thanks again
Yes but your husband would pay taxes on the 10k made off you....