Hello, I will be assisting you
Are these companies LLCs or corporations? Or a mixture?
Generally speaking, you can do it in one of two ways. The money is is investing in the LLCs could count towards his capital accounts.
the other way as you noted would be to count such money as a loan to the company
Right, so booked as an asset on the balance sheet : Loan to XXX $20.000" , correct?
if loan then yes. Person would then pay tax on the interest
BTW, there should be an interest associated with loans or they may not be considered loans
the interest these days is very low and not impactful
so if left as "additional capital" in the equity the interest would not apply?
correct. Additional capital could mean a capital infusion into the member's capital account
okay, then could I create several "additional capital sub-accounts" on his personal balance sheet to reflect the correct balances to each of these companies? Right now they are all in one and I have no idea who owes how much.
he should have a separate capital account with each company
thank you! That makes so much more sense!
you are welcome
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