Loan from one company to another PLEASE HELP

Posted by NewRookie on 04/23/2009 - 11:36

My Client was an LLC and he has now started an S-Corp. Due to the payroll not being setup under the S-Corp yet I have to take the money from the S Corp bank account and move it to the LLC bank account to cover payroll until the account is setup in for payroll in the S-Corp which should be in a week. With this money being transfer as such is this considered a lone from the LLC to the S-Corp? When I write a check from quickbooks would I say "Loan to S-Corp"? Also since we are going to dissolve the LLC if this is a lone from LLC does the S-Corp have to show it paid back the LLC, how would that work? Please help.

Thanks in advance to anyone that can help me.

Tammy Garrett

2556 reads

Intercompany loans

In addition to the accounting issue, you need to pay attention to the tax implication. Intercompany loans are subject to interest income and expenses for tax purposes. Consequently, the loans need to be reported by both companies until the funds are reimbursed. Werner Reisacher

Posted by WReisacher on 06/13/2009 - 20:06

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loan from LLC to S corp

If payroll is not big, my suggestion would be to setup payroll and pay from the S Corp funds. You would have to do this anyway. You can also have the LLC loan to the S Corp and book it as a loan as you suggested. Using your way sounds like double work.

Posted by AnonymousUser on 04/24/2009 - 14:13

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Loan from one company to another PLEASE HELP

Intercompany loans

loan from LLC to S corp

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