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Level 2

Transferring funds from one corporation to a new corporation (501C3)

We have one corporation (A) and have recently began a second corporations (B), both of them are 501c3 non-profits. In order to help this new corporation 'B' get started, corporation 'A' transferred money from its' bank account to corporation B's bank account. 

 

I'm converting to Quickbooks online now and starting a brand new account for the new corporation B. My question is how do I enter this transfer of funds in the chart of accounts for both corporations? This is not a loan, and corporation B will never pay corporation A back. 

 

Thank you for any guidance!!

Solved
Best answer March 13, 2019

Best Answers
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Community Champion

Transferring funds from one corporation to a new corporation (501C3)

You need to talk to your Tax Accountant.  As a 501c3 you do not want to assume any info you get from any online forum will hold up in a tax audit.  Your accountant will know both companies and what you can legally do.

 

The QBs side of it should be pretty straight forward.  Payment from A to B, B showing the deposit.  It's documenting it correctly that's going to be the issue so there are no tax or legal issues.

 

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Level 15

Transferring funds from one corporation to a new corporation (501C3)

@StellaMaris 

 

I agree with Pete, get with a tax accountant

 

the issue is that the money taken from A, had to be for a reason in A's books. Either you loaned the money to the start up, or you were purchasing shares of stock in B.

View solution in original post

4 Comments
Highlighted
Community Champion

Transferring funds from one corporation to a new corporation (501C3)

You need to talk to your Tax Accountant.  As a 501c3 you do not want to assume any info you get from any online forum will hold up in a tax audit.  Your accountant will know both companies and what you can legally do.

 

The QBs side of it should be pretty straight forward.  Payment from A to B, B showing the deposit.  It's documenting it correctly that's going to be the issue so there are no tax or legal issues.

 

View solution in original post

Highlighted
Level 15

Transferring funds from one corporation to a new corporation (501C3)

@StellaMaris 

 

I agree with Pete, get with a tax accountant

 

the issue is that the money taken from A, had to be for a reason in A's books. Either you loaned the money to the start up, or you were purchasing shares of stock in B.

View solution in original post

Highlighted
Level 2

Transferring funds from one corporation to a new corporation (501C3)

Thank you for your help Pete_MC!

Highlighted
Level 2

Transferring funds from one corporation to a new corporation (501C3)

Thank you for your help Rustler!

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