Thank you. Follow-up questions...
A) Regarding my basis, would FMV be based on its value when I bought the item personally, or it's value at the time I transfer it into my inventory?
B) When I transfer the item to my inventory, does the basis function the same as a cost as if I were buying a new item from one of my wholesalers?
C) Let's say I paid $100 for the item a few years ago. If I sell it for $40 through the business, would the business show a loss of $60, thus reducing my tax liability?
This is separate, but you mentioned "the fact that you can pay yourself- that is- withdraw money out of your owner equity in the business." Does doing this incur personal tax, or is it built into everything since me and the LLC are the same entity for tax purposes? For example, if I bought a bunch of inventory for $1000, then sold it for $5000 the same year, would I pay income tax on $4000 at tax time? Then, if I were to transfer that $4000 to my personal accounta couple years either that year, or a couple years down the road, would there be anything else to report for tax purposes?
