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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28368
Experience:  Taxes, Immigration, Labor Relations
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Funds received in 2010 from investment fund in personal account

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Funds received in 2010 from investment fund in personal account which were later on transferred to an LLc account for buying investment properties. How do we report this transaction on personal return. Basically funds were in and out and no utilization on persona level.

LEV :

Hi and welcome to Just Answer!

LEV :

You do not report transfers from one account to another on your tax return.
You will only report income credited to either account.
For instance - if your account earned interest income - that amount is reported on your income tax return.

LEV :

If you owned shares of the investment fund and sold these shares to get cash out of your account - you need to report sale transactions and calculate your gain. You will be only taxed on the gain. If there is no gain - you will not have any tax liability. However - still will need to report the sale of shares.
If you held cash on your investment account - there is nothing to report.
Please verify if you receive any reporting form back in 2010 for your money transferred out of that account.
Please also verify if your investment fund was actually tax deferred retirement fund?
Let me know if you need any help.

Customer:

Now how the LLC will treat those funds.?

LEV :

The LLC treats these funds as your contribution. These amounts are not taxable and there is no need to report your contribution.
Is that a single member LLC? or there are several members?

Customer:

2 members on llc

LEV :

A Limited Liability Company (LLC) is a business structure allowed by state statute.
The federal government does not recognize an LLC as a classification for federal tax purposes.
The LLC with several members for federal tax purposes generally is treated as a partnership.


A partnership must file an annual information return to report the income, deductions, gains, losses, etc., from its operations, but it does not pay income tax. Instead, it "passes through" any profits or losses to its partners. Each partner includes his or her share of the partnership's income or loss on his or her tax return.

LEV :

Your contribution into the LLC is your investment - it is recorded on books - but will not affcet the tax liability.

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