Questions

How should I document my investment into a business for proof of transfer?

How do I go about documenting this and is it tax deductible?

3answers

Yes.

I will also add that you need to document what the funds are for: equity or debt.

A lot people fund their companies with a personal loan to the company for tax reasons.


Answered 2 years ago

Documentation is going to vary depending on corporate structure and type of investment, but essentially it's going to be paperwork stating the date of the transfer, the amount, and what you received in return. Debt investment is different than equity.

Capital contributions (equity investment) and loans (debt investment) are not deductible until they are deemed uncollectible.


Answered 2 years ago

First talk with your Tax Preparer.

There are many variables which must considered, which will be specific to your unique situation.

Way better to work out the correct way to do this before you conduct the transaction.


Answered 2 years ago

Copyright © 2019 Startups.com LLC. All rights reserved.