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What do you mean about capitalizing the business?
Normally in tax law that means you are amortizing the expenses over a period of time, such as depreciation, etc.
So I need to know waht expenses and capitalizing issues he has?
Thank you. I am sorry, but no, I did not get it.
So when you refer to capitalize, you mean he bought or took over your business, and added the assets to his books?
Thanks, XXXXX XXXXX makes more sense.
So your husband to money from his business and gave it to you as an investment to purchase capital equipment in your business is that right?
AND does he expect this money to be paid back, or is he earning interest on it. I need to make sure his is not in some way a loan. The difference is that a loan has a fixed payback schedule, and an investment has no such agreement of pay back but may be tied to shares of earnings or dividends, etc
If this is a loan, it is not taxable to you. You list it on your books as a liability.
If it is investment money, then it becomes income on which you have to pay taxes. BUT, if it is capital income, you are going to spend it on capital equipment; capital equipment will be treated as an expenses or depreciation expense using one of the depreciation conventions, depending on the class of property.
This becomes investment expense on your husbands books and he pays no tax on it, but, he may have to pay taxes on his investment earnings if he derives any dividends or interest for the investment.