Taxes for an LLC question?
I'm currently in the process of making a two member LLC and I'm confused about a few points about taxes.
I know that you can distribute the income from the LLC to the members and have that money be taxed through the members. Nice and simple.
But what if we decide to buy a building for our LLC business with money made from the LLC? Does the LLC buy the building and gets taxed on it?
It Will be in TEXAS btw.
- troLv 77 years ago
the LLC is only a state designation, it is not recognized by IRS unless as a Corp(C or S), a partnership or sole proprietor
if you are forming a partnership, as indicated, the partnership profit are distributed to the partners in a K(1) at the end of the year
if the partners chose to purchase a building it would depend on the contribution of each partner toward the building which would increase their capital accounts and possibly change their shares in the partnership
- Cathi KLv 77 years ago
You will have to do a partnership return then that info goes onto a K1 issued to the partners. Make sure you learn about all this before you do an llc.