I started a business this year and moved exactly $5000 from personal accounts to my business accounts. Can this be deducted?

[kellyf-ernst]

The business is a fully independent S-corp and all funds that I moved from my personal accounts went to startup and operating expenses in the business.

[MichaelMc · Accepted solution]

No. The money that you moved into the S Corp is your investment. It is not tax deductible, but is the starting point for your basis in the S Corp.

The S Corp, of course, can take deductions on its Form 1120S for the various expenses that it paid using your invested funds. Your share of profit or loss from the S Corp's operations will get passed through to you on Form K-1.

[kellyf-ernst]

Thank you! Wasn't sure if it counted as an expense or an investment.