USA Distribution to Officers

[coachhomer]

Hi all... I am new to the forum. I own a small business that is registered as an LLC and have a question regarding distributions. I took this company over about 2 years ago and the company has made a significant amount of money. When I took it over, I opened a business savings account. I have deposited the profit of the company over the past 2 years in this savings account. Since it is an LLC with two owners, myself and my mom, can I write distribution checks to each of us for the money that is in the savings account?

Thanks!

C

 

[Drmdcpa]

Not only can you but you should with one caveat. You cannot take distributions in excess of your capital account without causing tax issues.

 

[coachhomer]

Ok thank you. What is the capital account? Can you please expand?

Thanks!

C

 

[Drmdcpa]

If you a running a business, you should have a CPA in your back pocket instead of going on line to ask basic business questions.

 

[coachhomer]

If you a running a business, you should have a CPA in your back pocket instead of going on line to ask basic business questions.

I do have a CPA but there are a multitude of reasons that I would want to verify that what I am hearing is accurate. If you don't care to help then don't respond.

 

[Drmdcpa]

If you do not care to listen, then do not ask.