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Question: We formed an llc, we used our credit cards to get the business started, buy inventory, office supplies, etc..?

(Posted by: Kellie R on 2009-10-23 13:21:32)

We put maybe $9k or so on our personal credit cards, and we plan to own and run the LLC 50/ 50 just us 2. Is the $9k considered our initial capital investment for purposes of completing our Operating Agreement? We just filed the LLC today, we started the business 60 days ago and have spent $9k of credit cards to this point. We expect to spend another $2k then we will be able to use operating profits to pay them back and run the business going forward. So thoughts on the capital investment would be appreciated. Thanks!!

Posted by: the tax lady on 2009-10-23, 13:29:54

So, what does the operating agreement say as per expenses? if it mentions nothing, this is capital and a expense to the partnership. However, these are startup expenses and you can't deduct them until you are actually open for business.