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Level 1

Multi-Member LLC W-2 Income Deposits as Contributions

I am part of a startup multi-member LLC.   One of the partner's is self employed as sole proprietor of another business.  I am paid as an employee for large financial services company.


Is it possible to deposit all of our income to the LLC as a contribution, have the business pay its expenses from it, as there is no income yet and pay ourselves distributions from that money to pay our personal bills?


Thanks for your help in advance.

1 Comment
Level 15

Multi-Member LLC W-2 Income Deposits as Contributions

Yes, in fact that the way a partnership always works

personal funds invested are deposited as partner equity investment

personal funds taken are withdrawn using partner equity drawing


For a company taxed as a sole proprietor (schedule C) or partnership (form 1065), I recommend you have the following for owner/partner equity accounts  (one set for each partner if a partnership)

[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing - you record value you take from the business here
>> Equity Investment - record value you put into the business here


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