Posted by Frank Chin on July 20, 2002 at 05:36:32:
Hi Heeran:
I set up a “C Corp” this year, discussed the matter with my CPA, and:
1- Wrote board resolution calling for the company to reimburse shareholder for organizational expenses.
2- Wrote checks from the company re-imbursing myself for expenses incurred.
I designed a “Expense Report” form by Excel spreadsheet, so I actually file an expense report re-imbursing myself for expenses I personally paid or incurred including organization, mileage, medical co-payments etc. The receipts are attached to the expense reports.
I am in the process of forming an LLC for doing long-term sandwich deals (leases with option to purchase) Can I start doing the business prior to getting the LLC completed and all of the expenses that I’m paying for now to get the LLC up and running, can I eventually expense these once my LLC is finally formed? I’ll have to pay for everything out of my personal checking account or cash since I do not have a business account yet. Thanks in advance for your inputs.
Re: Expenses Incurred Prior to doing business - Posted by JHyre in Ohio
Posted by JHyre in Ohio on July 22, 2002 at 06:46:08:
Frank’s comments are dead on, as is usual for him. If the business is running, but the LLC isn’t up, the expenses will be deductible. If, however, the expenses are “start-up”, that is, precede both your
LLC AND your business, they are deducted ratably over 5 years.