How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Mark Taylor Your Own Question
Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2280
Experience:  Certified Public Accountant
Type Your Tax Question Here...
Mark Taylor is online now
A new question is answered every 9 seconds

I have a savings account I call Net Profit in my photography

Customer Question

Hi! I have a savings account I call Net Profit in my photography business, and I want to move that money into my retail company's checking account as an investment. I don't want to take a tax hit on it from my photography business, since it's not technically investing in my retail business. I, personally, am investing in it. The only thing I can come up with is to transfer the net profit money into my photo biz checking account, pay myself, moving the money into my personal checking, and in turn, taking that money and moving it into the retail business checking account. Is there a simpler way to do this?
JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: I don't think so.
Submitted: 8 months ago.
Category: Tax
Expert:  Mark Taylor replied 8 months ago.

Hi, my name is Mark. I will be happy to help you with your questions. What kind of entity is the photography business (S-Corporation, LLC, C-Corporation, or sole proprietorship)?

Customer: replied 8 months ago.
Both companies are LLCs, and I live in Florida.
Expert:  Mark Taylor replied 8 months ago.

Do you own 100% of the LLC's?

Customer: replied 8 months ago.
I own 100% of the LLC for the photography business, and my husband and I both own the retail LLC (splitting it 50/50).
Expert:  Mark Taylor replied 8 months ago.

Are either of the LLC's treated as S-Corporation's?

Customer: replied 8 months ago.
Expert:  Mark Taylor replied 8 months ago.

You can either move the money from the photography business to you personally and then to the retail business. If you chose this method your capital account in the photography business would decrease and your capital account in the retail business would increase. Another approach would be to transfer the funds from the photography business to the retail business. This could be treated as a loan between the two entities. With either option there should not be a tax impact. As long as you have basis (positive capital account) in the photography business you would be able to take distributions without have a tax impact.

Expert:  Mark Taylor replied 8 months ago.

I hope you found this information to be beneficial. If this answered your question please take a few moments to rate my response. A rating is needed in order for me to receive credit for helping you today. The rating bar is located at the top of the page – ranging from 1 to 5 stars. If you need me to clarify aspect of my response or if there are additional areas of the question that you would like me to consider please let me know. I would be happy to continue the discussion. It has been my pleasure helping you today.