How do you get money out of your LL without engaging in commingling ?

Asked about 2 years ago - Las Vegas, NV

My husband and I are sole managing members of an LL C specifically set up to hold real estate investment properties . Currently our LL C owns 3 properties that receive rental income . We have a separate business account and so far have kept the LL C's finances completely separate from our personal finances . Our question is : how to we properly get access to our rental income without " piercing the veil ? " Essentially , how do we properly pay ourselves a dividend or profit sharing ( we want to avoid salary ) so that we can access our rental income ?

Attorney answers (2)

  1. Answered . I presume you are treating this as either a 1065 Partnership or Schedule C on your 1040. In either case the income and expenses will pass through to you as members. You can make partnership draws. Please consult your tax attorney to make sure this LLC is set-up right.

    Good luck!

    Ron Cappuccio

    If you do not like this answer or disagree, please look at one of the other answers provided. It is not necessary... more
  2. Answered . In general, the tax impacts of an LLC taxed as a partnership and the consequences of distribution or previously taxed earnings are separate issues. Such a distribution is not generally a taxable event. The payment of such a distribution does not undermine the liability integrity of te LLC so long as it is appropriately capitalized. You may have even more flexibility i f this is treated as a disregarded entity. You really need to discuss the issues with your CPA and /or tax attorney to obtain a complete understandingof how an LLC works.

Related Topics

Small business LLCs

An LLC (limited liability company) is a business entity that has elements of both a corporation and a partnership (or sole proprietorship).

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