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Old 11-28-2015, 10:55 AM
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Gift Tax Use from Personal to Business

Hello,

I received a gift from my grandparents from India to my personal bank account in the US. I also own a LLC and am a partner in the US, sharing 50% of the company. I wanted to use the gift I received for the business - Are there any tax implications on this? Can I simply transfer the money from my personal to business without stating any tax forms?

Thank you



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Old 11-28-2015, 11:53 AM
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I received a gift from my grandparents from India to my personal bank account in the US. I also own a LLC and am a partner in the US, sharing 50% of the company. I wanted to use the gift I received for the business - Are there any tax implications on this?======>>>>>>>>>No however, aslognas the amt of the gift exceeds $100K, you MUST file form 3520 with the IRS. The form of 3520 is just an info return not tax return form. IRS Form 3520 is due on the same date as your annual income tax return, including extensions; You may be subject to a penalty equal to 5%, but not to exceed 25%, of the amount of the foreign gift for each month for which failure to report continues. You may also be subject to a penalty if you file IRS Form 3520 but it is incomplete or inaccurate.







Can I simply transfer the money from my personal to business without stating any tax forms?===>>>>>>>>>>>>>If your biz is an sole proprietorship or SMLLC, I mean a disregarded entity, then no problem; you may simply /freely transfer money from personal acct to biz acct or vice versa as owner’s draw or owner’s deposit As a disregarded entity, Distributions of monies from the LLC to the owner is of no tax consequence. Such distributions are treated as non-taxable draws out of the business.
But if the biz form is a subchapter C- or S corp,or MMLLC, then, transfer from your checking account into the corporation would be treated as a capital contribution or APIC or a loan...neither of which would be a taxable transaction. If you transferred money from your corporation to yourself, in order for it not to be taxable you will need to treat it either as a loan to you or a repayment of the prior loan made by you to the corporation or as dividend or distribution for S corp. You want to be careful about transferring money back and forth. The reason you have this corporation is likely the limited liability protection. If you don't respect the separateness of the entity from your personal funds, a creditor could pierce the corporate veil and you could find yourself personally liable for corporate debts.



it's just that you can't do it in reverse (I mean puting business check in your personal account) unless you write yourself a check.



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