paying back an Owners’ Investment in a new calendar year

kvielmo1 · ‎January 15, 2021

Hi,

I use QBO to track income and expenses for an Airbnb property of mine. This property is its own LLC with its own bank account.

In late 2020 I decided to get solar panels installed on the property. I didn’t have enough cash in the LLC’s bank account to pay for the solar panels so I had to loan the LLC some money. I deposited money from my personal savings account into the LLC’s bank account and tagged the deposit in QBO as “Owner’s Investment”. This occurred in Dec. 2020.

At some point in 2021 I wish to use funds from the LLC bank account to pay myself back for this loan.

When I transfer the money in 2021 back to my personal savings account (equal to what I put in), do I tag the withdrawal as (like before) “Owner’s Investment”?

I want to make sure that my CPA doesn’t want to take me in this withdrawal as income.

Thanks!

Kelly

Rustler · ‎January 16, 2021

I use owner drawing, but you could use investment. Correct form is not to post both debits and credits to the same account

I suggest for sole proprietors and partnerships the owner/partner equity accounts look like this:

[name] Equity (do not post to this account it is a summing account)

>> Equity ( first of the year roll up drawing and investment into this account as well as retained earnings)

>> Equity Drawing (record the value you take from the business here)

>> Equity Investment (record the value you put into the business here)

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paying back an Owners’ Investment in a new calendar year

paying back an Owners’ Investment in a new calendar year

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