I just formed a single member LLC to provide consulting services at the beginning of March. In November of last year, I entered into a consulting agreement to help a company create certain documentation. The agreement provides for three equal payments to be made based on completion of defined milestones. The first payment was received in January of this year. The next two payments are still to come. Can I transfer the consulting agreement to the LLC as an asset so that the remaining two payments become income to the LLC? What about the payment that was received prior to the LLC formation? If I cannot make such transfers, do I then need to fill out two Schedule Cs when I file my taxes next year, one for a Sole Proprietorship and another for the LLC (assuming I have other income to report for the LLC)?
I have a similar question relating to business expenses. I have travel and living (T&L) costs associated with attending a week-long meeting related to the consulting work in February prior to formation of the LLC. I expect to have additional expenses for attending other meetings later in the year as well as the costs for things like the LLC filing fee and office supplies. Can the T&L costs for the February meeting (about $1500) be transferred to the LLC?
If I cannot transfer the two remaining consulting agreement payments to the LLC, and if I fail to land any other contracts that would provide income for the LLC, would I be better off not charging the T&L expenses to be incurred later in the year to the LLC? That is, should they be charged as expenses to the Sole Proprietorship?
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