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Level 1

Add yourself as an employees for Payroll purposes LLC S

Owner of the company sold his personal vehicle to an employee so that the employee could pay for it weekly for 2 years through payroll deduction.


The owner does not want the money, and is choosing to leave it in the company.


How do I record this?  This is an LLC.  My original though would be to  -


I will set up an A/R account for the sales price of 10,000.00 which will be reduced each week through payroll deduction until it is paid in full, but what is my offset? an increase to owners equity?



Level 9

Add yourself as an employees for Payroll purposes LLC S

This is your personal vehicle and not a company owned vehicle, thus you gave your employee an employee payroll advance equal to value of your personal asset. The employee should have been issued a non-paycheck for this advance (non-taxable), and it should have been posted to an asset or other current asset account. The check would not actually be deposited, it would just be a record of the advance booking the total amount to be repaid to your Balance Sheet. Then you setup a payroll deduction to pay back the advance using the same account so that each payment reduces the balance of the employee advance asset account until paid in full. The payroll deduction is a deduction from net pay and thus not taxable. QuickBooks has some good info here:

Level 10

Add yourself as an employees for Payroll purposes LLC S

It's not a receivable for the business, it's a personal receivable for the owner, but if this is not a corporation, then it doesn't matter from a tax point of view, as there is no balance sheet on the tax return. But why put this as an asset in the LLC, and risk losing it if the LLC is sued.

So I would post the payroll deduction to an equity contribution account, every pay run

Level 9

Add yourself as an employees for Payroll purposes LLC S

True, makes sense, and good point.

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