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Level 1
posted Apr 11, 2023 9:44:45 AM

What is a cash member contribution to llc and property member contribution to llc?

I'm filing taxes for the first time for my LLC. Does this mean I need to include what we (both members) paid for the property we purchased, the property taxes we paid, and the funds we each put into the business bank account when we opened it?

0 3 891
3 Replies
Expert Alumni
Apr 11, 2023 10:28:21 AM

Yes, anything you contributed to the LLC to establish your basis needs to be reported as partner capital and partner capital.  You need to enter the value of the property you each contributed as your individual basis in the property at the time of contribution.  

 

See Pub 541 for more information.

Level 1
Apr 11, 2023 4:09:10 PM

@AliciaP1 does that include all expenses? Closing costs, attorney fees, property taxes, repairs, what we contributed to the checking account to open it? 

Expert Alumni
Apr 11, 2023 5:43:23 PM

Generally, yes. Your cash contributions to the LLC would be reported as partner capital.

 

For property, your capital contribution is the adjusted basis. You don’t say whether you purchased a property and contributed it immediately into your LLC or whether this is an existing property owned by one or more of the members — and whether there was a mortgage or appreciation or decrease in value from the date of purchase.

 

See 26 CFR § 1.722-1 - Basis of contributing partner's interest for examples.

If the property gained or lost value prior to contribution, an adjustment may also be necessary. 

 

See Allocations to account for built-in gain or loss for additional examples.