Transferring personal money to a one member LLC
HSBC is offering 2.5% on business savings account, they are offering only 1% on personal savings account.
Can I safely park my personal savings into my One Member LLC savings account – disregarded entity ? This LLC is for a passive income management: owns and collects rental income from a 2 family property.
My regular CPA tells me no – and my CPA friend says ye that it can be construed as funding and distributed anytime..
Whats the risk if any?
Hi Thierry, great question.
I agree with your regular CPA. You never want to commingle business and personal funds under any circumstances. It gives the IRS and other stakeholders the impression that you don’t really know how much is business versus what is personal funds. If you are ever audited, you could lose your LLC status. I don’t think it’s worth the risk.
Best of luck,
Crystalynn Shelton, CPA