LLC income taxable if not taken out of llc account?

[Bonnie Y.]

Hello everyone, I'm new to RE investing. I have two cpa telling different things on this--if I I don't take income out of my llc account, do I have to pay tax on it when I do personal income tax?  One cpa says yes, u must. The other says, no you dont have to, especially in ohio. Pleae share ur thpughts. Confused. Thanks a lot!

[Ronald Wilson]

There is some missing information here......

If there initial Investment has not been repaid by the LLC, then there is no Taxable gain.

To Jeff B. comment: The amount of Taxable income an individual pays from an LLC earnings is based off of the K1 that is issued from the LLC to the individual.

Taxes are based on actual gain, not repayment of initial investment.

Further, if the LLC as an entity directs gain to be re-invested , and no Cash is paid out to an individual as an LLC owner, there would be possible Taxation on the gain depending on how it is claimed.

Rather than speaking with investors and CPA's. It would be best to speak with a Federal Tax Attorney with regards to your options. This is the best course of recommended action.

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