Once Sole Proprietor, now LLC. Assests question

[Bobby5301]

Hi, All!

I'm very new to all this and appreciate ANY advice.

My situation: For most of 2021 I have been running a business as a Sole Prop. Mostly in a consulting role, however I did need to purchase equipment for the Sole Prop. in order to do some of the roles needed. Some of them were in the Video Game space where I had to purchase some video game consoles as well as software to perform the tasks needed.

Now I have created an LLC for this company. Can I transfer those assets to the new LLC and how would that work? I assume in the Sole Prop. that some of that equipment would be write-off eligible, if I transfer the assets will that no longer be the case?

Thanks again for all of the advice!

[Critter-3]

If the LLC is a single member LLC that has NOT incorporated then nothing for you has changed.   You will continue to file the same Sch C like always if the business did not really change fundamentally and you will add the LLC EIN (if you got one) to the business info for the Sch C.  

[Bobby5301]

Yes, it's a single owner.

So I do not need to transfer assets?

[Critter-3]

You are NOT transferring anything ... you will continue with the same Sch C as you always have in the past ... the only thing extra to do is add the EIN (if you got one) to the Business info section of the Sch C.  

[Bobby5301]

Got it, thank you!

Sorry for the confusion. This is all just new to me and ive read probably 5 articles online about "transferring assets to an LLC".

Good to know that is not needed.

[Carl]

When it comes to things like assets, the only difference between a sole proprietorship and a single member LLC, is the spelling. Literally! There's only one  thing that "might" change on your SCH C.

- You'll add the letters "LLC" to the end of your business name.

- You will remove the SSN from the SCH C and replace it with your EIN, assuming you got an EIN from the IRS. If you don't have an EIN, then I highly recommend you get one yesterday, if not sooner. Takes 10 minutes on line and doesn't cost a penny.

[Bobby5301]

Thank you!

And, yes, I did get an EIN.

[Critter-3]

@Carl 

The EIN is added to the Sch C but the SS# is never removed.  

[Carl]

On the SCH C, you really don't care about that. There are only two entities that need to know what SSN that EIN is tied to. You, and the IRS. But if you issue any 1099's or other tax reporting documents, you only put your EIN on those documents.