Business Bank Account
I just opened my business(S-Corp) bank account and its balance, of course, is zero. I have some money I would like to deposit into it to get it started, but am not too sure how to account for this deposit. How would I account for this deposit with regards to taxes? How about on my Profit and loss statement? Do I have to purchase my own business stock in order to make this deposit?
Thanks,
Nate
Book it as a debit to cash and a credit to John Doe Capital. Pretty much create an equity account with your name on it. It wouldnt show up on the profit and loss statement (ie income statement) it would be on the balance sheet.
The advice below generally would apply to a sole proprietorship or partnership, not a corporation....
Quote:
On 2005-11-20 11:55, Eric5 wrote:
Book it as a debit to cash and a credit to John Doe Capital. Pretty much create an equity account with your name on it. It wouldnt show up on the profit and loss statement (ie income statement) it would be on the balance sheet.
Keep in mind that some states have minimum capitalization rules ... that said, the money you put into your business can either be via the purchase of your corporations stock or in the form of a loan to your business. You should consult with a professional tax advisor to determine what method is appropriate for your situation and to determine if the state of incorporation has any capitlization rules...
Read here answer your own question with it:
http://www.irs.gov/faqs/faq-kw42.html
10.1 Capital Gains, Losses/Sale of Home: Property (Basis, Sale of Home, etc.)
I lived in a home as my principal residence for the first 2 of the last 5 years. For the last 3 years, the home was a rental property before selling it. Can I still avoid the capital gains tax and, if so, how should I deal with the depreciation I took while it was rented out?
If, during the 5-year period ending on the date of sale, you owned the home for at least 2 years and lived in it as your main home for at least 2 years, you can exclude up to $250,000 of the gain ($500,000 on a joint return in most cases). However, you cannot exclude the portion of the gain equal to depreciation allowed or allowable for periods after May 6, 1997. This gain is reported on Form 4797. If you can show by adequate records or other evidence that the depreciation allowed was less than the amount allowable, the amount you cannot exclude is the amount allowed. Refer to Publication 523 , Selling Your Main Home and Form 4797 (PDF), Sale of Business Property for specifics on calculating and reporting the amount of the eligible exclusion.
References:
Publication 523, Selling Your Home
Publication 527, Residential Rental Property
Publication 587, Business Use of Your Home
Form 4797 (PDF), Sale of Business Property