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Bookkeeper2002
Level 1

Transfer of Funds from Subsidiary to Parent Company

Overview: Wholly Owned Subsidiary / Operating LLC wishes to move/transfer money to the Parent / Holding Company, which is an S Corp with 3 Shareholders.  Each company has its owns Books. The transfer of funds is to pay Salaries / Distributions to Shareholders.  The 2 Companies however file 1 consolidated tax return (1120S & K-1 to Shareholders), want to avoid QuickBooks showing the income twice.  This is not a loan. 

 

What is the correct way to tag & report in each company's Quickbooks? 

 

Thank you for any help. 

Solved
Best answer May 11, 2018

Best Answers
MichaelDL
Content Leader

Transfer of Funds from Subsidiary to Parent Company

Thanks for reaching out to the Community, Bookkeeper2002.

I have some great insight to provide you on this situation. Inter-company transfers are a bit tricky, and largely depend on the structure of the businesses involved. If the company is complex enough to require a second QuickBooks, there may be a predetermined way to record these transfers. For a general idea on how you can accomplish this, check out the QBO guide on inter-company transfers here.

As the article notes, please be sure to consult your accountant or tax professional to ensure you record it in the correct accounts based on your situation. Let me know if there's anything else I can do for you, and have a great day.

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3 Comments
MichaelDL
Content Leader

Transfer of Funds from Subsidiary to Parent Company

Thanks for reaching out to the Community, Bookkeeper2002.

I have some great insight to provide you on this situation. Inter-company transfers are a bit tricky, and largely depend on the structure of the businesses involved. If the company is complex enough to require a second QuickBooks, there may be a predetermined way to record these transfers. For a general idea on how you can accomplish this, check out the QBO guide on inter-company transfers here.

As the article notes, please be sure to consult your accountant or tax professional to ensure you record it in the correct accounts based on your situation. Let me know if there's anything else I can do for you, and have a great day.

View solution in original post

Suprieta
Level 1

Transfer of Funds from Subsidiary to Parent Company

I have a question that may be a bit off-topic.  I am negotiating an agreement for telecommunications and one of the provisions says that a Party may only assign the agreement to a wholly-owned subsidiary.  

 

My question is why is it necessary that a subsidiary be wholly-owned to make an assignment?  What is significant about the ownership of the subsidiary for assignment purposes? Thanks for your input. 

Candice C
QuickBooks Team

Transfer of Funds from Subsidiary to Parent Company

Good Evening, @Suprieta

 

Thanks for joining in on this thread. I can provide you with some information regarding your question about a subsidiary. 

 

To give you the best answer to your question, I recommend consulting with your accountant. They'll be able to give you more accounting advice to help your business. Don't worry if you don't have an accountant. You can use this link to find one near you. 

 

For a future reference, here are two articles that may be able to help you out: 

 

 

After talking with your accountant, you should be able to determine the best route for your business. If you still have other questions, don't hesitate to ask. I want to make sure all of your concerns are addressed as soon as possible. Bye for now!

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