Hi all;
I have a very basic question as I am new to this. When setting up and using an LLC for real estate, how does one use the funds in the LLC? I know you can put more money into the LLC or its’ separate bank account, but what if you need to tap any $ for your own usage (non-business related)? How do you do this the right way? I appreciate any advice; thank you!!
EJ
What does the operating agreement say? That defines when and how you can take money out.
the answer is NOT to write a LLC check to pay your personal bills. this is comingling.
you can take a salary (with all the related payroll tax issues)
you can take non-employee compensation (and send yourself a 1099)
you can MAYBE take a distribution of LLC pre-taxed profits (depending on how the LLC is taxed, whether it has had profits, amount of debt basis, if any, what the operating agreement says, etc.)
you can take a loan from the LLC (if allowed by the operating agreement and other members)
you can take a return of contributed capital (assuming that you have contributed capital, if allowed by the operating agreement and other members)