What is the name of your state (only U.S. law)? Washington
My LLC buys and sells used batteries online and in person. Over the years, my wife's family has given her lots of jewelry that she no longer likes. Now, she wants to sell it all on eBay.
For however small the liability protection of my LLC, I would like to have my LLC purchase the jewelry from my wife, and then sell it on eBay under my LLC account.
Anything wrong with this?
Roughly, here are the steps: my wife has 10 pieces of jewelry that should sell for $200.00 each. My LLC will write her a company check for $500.00 (just $50 per item) and then list them on eBay under my LLC eBay account for $200.00 each.
If all the items sell, that would be a $1,500.00 gross profit for my LLC. If nothing sells, that would be a $500.00 loss for my LLC. Either way, I'll make sure to give the exact figures to my CPA at tax time.
My question: in theory, this sounds just fine: one 'entity' buying something from another 'entity' and trying to sell it for a profit. However, the "feeling" I feel is that this procedure is somehow "fishy." I'm not sure why I feel this way.... maybe because my LLC only buys/sells batteries? Maybe because it feels weird having my LLC buy from my wife? I'm not trying to "profit" from this, or "find some tax loophole."
What are the pros, cons, and ramifications I haven't thought of?
Thank you.
My LLC buys and sells used batteries online and in person. Over the years, my wife's family has given her lots of jewelry that she no longer likes. Now, she wants to sell it all on eBay.
For however small the liability protection of my LLC, I would like to have my LLC purchase the jewelry from my wife, and then sell it on eBay under my LLC account.
Anything wrong with this?
Roughly, here are the steps: my wife has 10 pieces of jewelry that should sell for $200.00 each. My LLC will write her a company check for $500.00 (just $50 per item) and then list them on eBay under my LLC eBay account for $200.00 each.
If all the items sell, that would be a $1,500.00 gross profit for my LLC. If nothing sells, that would be a $500.00 loss for my LLC. Either way, I'll make sure to give the exact figures to my CPA at tax time.
My question: in theory, this sounds just fine: one 'entity' buying something from another 'entity' and trying to sell it for a profit. However, the "feeling" I feel is that this procedure is somehow "fishy." I'm not sure why I feel this way.... maybe because my LLC only buys/sells batteries? Maybe because it feels weird having my LLC buy from my wife? I'm not trying to "profit" from this, or "find some tax loophole."
What are the pros, cons, and ramifications I haven't thought of?
Thank you.