Can I deduct seed money from my personal income tax that I invest into my new C-corporation that I’ve started?
Posted on February 8, 2009 by admin
Flair asked:
My tax person told me to get my company to reemburse myself for 2007 and 2008 seed money that I’ve invested (and will be investing), but I’m not at all very keen on that idea. Can I instead legally deduct this money from my personal income tax? Thank you in advance.
My tax person told me to get my company to reemburse myself for 2007 and 2008 seed money that I’ve invested (and will be investing), but I’m not at all very keen on that idea. Can I instead legally deduct this money from my personal income tax? Thank you in advance.
No, that can’t be deducted. When you put money into a corporation, it either goes in as a loan or as an investment (just like buying stock in any public company). If the loan or investment becomes worthless at some point, then you could write it off. Until then, you are considered as having an asset.
if you’re “investing” it, it’s not deductible – who is your tax guy? Bozo the Clown? If you ever sell your interest in the business from that “seed money investment”, then you calculate gain or loss and Bozo is an idiot telling you to get the company to reimburse you – IF that was allowed and they hadn’t already done that by 12/31/2007, that “reimbursement” wouldn’t help you at all for your 2007 tax return – you’d have to wait until you file your 2008 tax return next year, because you would not have gotten the money in 2007 – what a clown that guy is
And why would you want to mix your personal taxes with the corporation ? beats me. I think the startup costs is deducted over a period on the corporations taxes not your personal tax. check with someone who knows