Re: Business Funds...

Posted by hlunsford@bellsouth.net on June 29, 2006, 12:15 am

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Shhhh wrote:

> On January 6th of this year 2006, I started doing some work

> from home as a Sole Proprietor, I have applied for Illinois

> DBA license through the business registration form. I opened

> a bank account in the name of the business to make sure even

> though the businesses income and my income are one in the

> same, I'd be able to keep better track of expenses.

> I'm happy to say business is going quite well, I invested

> $15,000 of my own money to get up and running and in only

> two months have more than tripled it.

> There's the back ground.... here's my question... business

> is going quite well now, and I do not need any more funding,

> and my expenses are quite low (as I am the only "employee").

> I don't want this cash just sitting in a bank account.

> Is it possible/legal to open a brokerage account in the name

> of the company and take the cash out of the bank and trade

> with it? (To be clear, I don't intend to take all the money,

> I'll still have some backup in case of emergency)

> If I do trade with the companies money, and lets assume

> (dangerous I know) I'm successful does that money I made get

> reported on my schedule "C" as income? How do I deal with

> that?

> I'm sorry, I realize I asked a lot of questions, but at

> least to me they are important.

Sounds complicated but it isn't. as a proprietor, there is
legally no difference between you and your business. Of
course we advocate keeping business and personal funds and
affairs separate of course.

So withdraw what you wish from your business account and do
with it what you will, even investing in the market. The
brokerage house will open the account in your name anyway
versus the company name. Results will be reported on
schedule d with your 1040.

ChEAr$,
Harlan Lunsford, EA n LA

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