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Experienced Member

How to enter a material contribution as Owners Equity to multi partner LLC taxed as partnership

How to enter (quickbooks online) a material contribution to multi partner LLC taxed as partnership? I want to contribute COGS (materials), architectural plans that are valued at x dollars as Owners Equity. I have an Equity contribution defined for each of the partners.

4 Comments
Established Community Backer ***

Re: How to enter a material contribution as Owners Equity to multi partner LLC taxed as partnership

Record the expenditure for FMV of items using Expense screen and post from your equity contributions account. If you have to funnel it through a clearing bank type account you can do tgat as well.

Established Community Backer ***

Re: How to enter a material contribution as Owners Equity to multi partner LLC taxed as partnership

Oh, and the items will post as inventory assets not COGS. COGS is the income half of the item and is only applicable when items are sold.

Experienced Member

Re: How to enter a material contribution as Owners Equity to multi partner LLC taxed as partnership

You cant post directly from an equity account. From what I understand you suggest setting up yourself/the partner as a vendor paying from a dummy bank account ? Then the balance on the dummy account goes negative and you 'finance' it from the Equity account ?

Established Community Backer ***

Re: How to enter a material contribution as Owners Equity to multi partner LLC taxed as partnership


@bldr wrote:

You cant post directly from an equity account. From what I understand you suggest setting up yourself/the partner as a vendor paying from a dummy bank account ? Then the balance on the dummy account goes negative and you 'finance' it from the Equity account ?


Yes

I prefer to set up a cash type bank account called partners, make it inactive when it is at zero balance and not in use.

 

Pay the expenses or buy the assets from that account driving the balance negative

 

make a deposit in that total amount and use partner-[name] equity investment as the source account for the deposit