If I invest in my own small company, such as from my checking account, is that a taxable event?
January 27th, 2010 | by The Broker |
SleepyMushroom asked:
I’m trying to start a small business. The only investment I have is what will be coming out of my own paycheck at my real job. Since it’s easy for me to transfer money from my personal checking to my new corporate account, entitled by my option-S C-corp, does my business owe taxes on it?
I’m trying to start a small business. The only investment I have is what will be coming out of my own paycheck at my real job. Since it’s easy for me to transfer money from my personal checking to my new corporate account, entitled by my option-S C-corp, does my business owe taxes on it?
3 Responses to “If I invest in my own small company, such as from my checking account, is that a taxable event?”
By The CPA Guy on Jan 28, 2010 | Reply
No. Businesses don’t pay taxes on funds that were used to purchase equity in the company.
By Jss on Jan 28, 2010 | Reply
When you invest in your business, it is not a taxable event. Almost all business need capital investment.
Why do you need S or C corporation? Before, registering a corporation, you must understand its implications.
You can have a sole proprietor business, LLC as sole proprietor, partnership, LLC as partnership, LLC treated as corporation, S-Corp or C-Corp.
By tro on Jan 30, 2010 | Reply
you need a lesson in accounting
no the infusion of cash is not income, nor is it deductible by the investor,unless the business goes broke