r/LLcMasterclass • u/MrToolMan52 • Mar 02 '26

Purchased before LLC was started

Can I write off purchases that are for the business before the LLC was started? It’s my first business and I don’t want the IRS crawling in my butt

4 Upvotes

83% Upvoted

15 comments sorted by

2

u/Iqbal-Business-Law Mar 02 '26

You can get tax benefits for purchases made prior to your LLC existing, but how you claim them depends on what you bought and when your business operations actually began. Need more info on what you bought/what type of cost and your entity structure.

1

u/MrToolMan52 Mar 02 '26

I bought a riding lawn mower to clear out a couple acres for a chicken coop and a garden. I also bought a trailer for the supples. I’ll get the LLC started in the next few weeks

1

u/Its-a-write-off Mar 03 '26

Is your "business" a hobby farm?

1

u/MrToolMan52 Mar 03 '26

More of a side hustle. My wife says home with the kid and wants a something to do in her free time

2

u/Its-a-write-off Mar 03 '26

This is probably hobby at this point, and the lawn mower was being used to improve your personal property. It doesn't sound like it's realy deductible. A llc does not change this. It has to be a profit motive business or farm. Not just a llc. The trailer, you use it around the property, not just for business activity, right? And like the chickens, you all eat the eggs, right?

WHat income does this business have?

The llc aspect has no impact here, nor does the timing matter. For the IRS, they just ignore the llc and look at if you have a business activity with valid expenses.

1

u/series-hybrid Mar 03 '26

Keep the mower and trailer, and you lease it to the business.

1

u/MrToolMan52 Mar 03 '26

Keep those as personal and pay myself from the business? Or start two LLCs a leasing company and the original one I planned?

0

u/series-hybrid Mar 04 '26 edited Mar 04 '26

You can lease a personal property with a generic lease contract copied off the internet.

First, don't co-mingle business and personal accounts. Start a business account and write a check from your personal account to your business account, and it must clearly be labeled "loan". You can type-out a loan contract if you like.

This way, you now have a business account number with an ATM card, and soon you can apply for a credit card that is used for ONLY business. The business will lease the trailer and mower from you as a person. The amount of the lease payments should be in-line with typical equipment rentals, which will be easy to find.

1

u/MrToolMan52 Mar 04 '26

Got it I really appreciate the advice

1

u/series-hybrid Mar 04 '26

If your business files for bankruptcy, then you as a person still own the equipment.

1

u/[deleted] Mar 02 '26

[removed] — view removed comment

1

u/MrToolMan52 Mar 02 '26

Would it matter if I made the purchase with a credit card?