Taking back invested money in LLC

[wizash2]

All,

I have a question.My wife started LLC in 2012 and invested about 3200$ but no income that year. In 2013 she poured another 2000$.
Now LLC has some income also I got added as another member.

Can she get those 5200$ back from the company ? Are there any tax implications?

Thanks for your help and assistance!

Regards,

[Business Attorney]

She can certainly withdraw money from the LLC but if she draws so much that the business is insolvent she may be liable to creditors for the shortfall. Even if the business is not insolvent but after the withdrawals is not adequately capitalized, it may provide a basis for a creditor seeking to pierce the corporate veil.

As for the tax consequences, if it is a single member LLC and is treated as a disregarded entity for tax purposes, she can take whatever cash she wants with no tax consequences. If the LLC has more than one member and is treated as a partnership for tax purposes, she can take out any amount up to her "basis" which is the sum of her original investment plus any net taxable income (or less any net loss). If it is treated as a corporation, there is a whole different set of rules, but that is unlikely to be the case.

[wizash2]

Thanks!
We don't have any external credit and since May 2013 it's 2 member partnership. I think I will ask her to take original money invested :)
Thank you again!