I manage an LLC that purchased an apartment house. We have 5 owners of the LLC.
We purchased the house for $275,000.
We have a bank mortgage of $220,000
Shareholder #1 (Dad) put down $55,000 to get the bank mortgage.
Shareholder # 1 (Dad) spent $36K in repairs and $10K in general expenses for a total of $46K to fix the house up to get it rented.
Shareholder #1 (Dad) considers the $101k ($55K + $46K) as loans to the LLC
Shareholder #2 (Son1) put $10K into the LLC as a loan.
Since these are loans to the LLC it does not change the ownership % of the 5 owners. Ownership is 35% (Dad), 10% (Son1), 10% (Son2), 10% (Son3), 35% (Mom).
On TurboTax Business under Balance Sheet I claim Total Amount of mortgages, notes or bonds to be due in more than 1 year as = $331,000 = bank mortgage ($220K) PLUS shareholder loans ($111K).
Under Other Liabilities I show each of these notes
Bank = $220K
Shareholder 1 = $101K
Shareholder 2 = $10K
For the total $331K
Next page is Capital Stock
Enter the balance of the Corps Capital Stock accounts at the end of the year = ?
What is this ?
Someplace someone wrote that Capital Stock is the number of shares times the par value = What is par value (stated) ? How do I determine that ? The purchase price ?
Next it asks What was the amount of any additional paid-in capital = but this appears to be money given by shareholders for additional equity = in my case, we consider the money as loans since we are not asking for additional equity. Is that correct ?
Can anyone help explains these to me ?
The "Explain This" shown for each of these is meaningless to me.
For most businesses people issue stock as $1 par value and according to the percentage of ownership each partner has in the business. This is something you determine when you start a company. The par value of the stock issued can be any amount that you would like it to be since it is a privately held company.
You may not have Additional Paid in Capital if you are calling the money the partners put in as a loan to the company. If you are going to classify the money from the partners as loan you should have documentation showing that it is a loan and the terms of the loan being repaid along with a stated interest rate.
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