How do you pay yourself?

[Gerald Lunetta]

I'm about to finish up with my first flip. I have it in a LLC, after I finish and sell it my accountant suggests I should open either another LLC or land trust to pay myself from. What do you guys do and what are your thoughts?

[David M.]

@Gerald Lunetta

Seems a little odd.. If you want to "decapitalize" the LLC, assuming its a single member LLC, you just take what is called an "owner's draw" and transfer the funds from the LLC's bank account to your own bank account. You would annotate/mark the transaction as such for accounting purposes. Remember, you aren't taxed on what comes out of the LLC's bank account. Its a pass-through entity (unless you elected a different tax status). Your accountant should know this.

Nothing immediately comes to mind about what your accountant is suggesting, but there isn't much information about any additional circumstances.

Good luck.