Tax Consequences of Investors Funding a Search

searcher profile

March 26, 2020

by a searcher from IESE Business School in San Clemente, CA, USA

I'm working on getting funding for my search and one of the big questions we have is with regards to how the funding works and the best way to do it for tax purposes. If I sell units in my LLC, will that income be taxed immediately, or will it only be taxed as the amount of salary that I take? Is it better to be fully funded upfront for the search or to be funded, say, every six months? Furthermore, is the seed money an investment or an expense for the investor? Is there a way to make it an expense, like setting up as employees if it's a single investor?

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Reply by a professional
from Walsh College of Accountancy and Business Administration in Detroit, MI, USA
All good questions. email me at redacted and we can set up a call to talk through your tax questions.
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