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Question

company is an llc. initial investment of 20K. stock is sold back to company for 32k. the member had taken a 4k draw. what account does the loss of 8k go to in a llc

Submitted: 25 days and 18 hours ago.
Category: Tax
Value: $30
Status: CLOSED
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Optional Information

State/Country relating to question: Wyoming

Posted by RD 25 days and 17 hours ago.

Info Request

Is the LLC 100% owned by this member?

25 days and 17 hours ago.

Reply

no, ownes 25%. initial investment 20k, sold 32k, also had a 4k draw. i need to know the JE. Particulary the account to post the loss on the buy back of the 2500 shares.

Accepted Answer

There will be no loss to record in the LLC.

Presuming the LLC is filing as a Corporation, the LLC will record this as a Treasury Stock.

Entry will be

Treasury Stock $32K
Cash Cr $32K.

The Treasury Stock account will be a negative account under Equity Section. When these shares are reissued the entry will be recorded via the treasury account.

Let me know if you have any question.

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.


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Expert: RD
Pos. Feedback: 99.4 %
Accepts: 
Answered: 10/27/2009

Certified Public Accountant (CPA)

CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..

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