Question Regarding LLC Capital Contributions

[Wm]

Tue, 10 Mar 2015 13:00:29 <000301d05b5c$1d64d290$582e77b0$@com>  Jim 
Guthrie <jim at guthrieranch.com>

>I am trying to use GnuCash to set up the books of an LLC my wife and I
>created as part of our estate planning strategy. This LLC has as assets a
>cabin in the mountains in New Mexico that my wife and I transferred to the
>LLC.

[1]

>The members (owners) of the LLC are myself, my wife and our five adult
>children. The intent of the LLC is to provide the means to transfer
>ownership of the cabin and keep it in the family after my wife and I pass.

I strongly suggest you either do it (make the transfer) or don't.  I may 
also suggest that five adult children each with their families may not 
thank you for the apparent portion gift.

> I
>won't go into the details of the advantages of doing this compared to other
>approaches but only to say it avoids certain taxes and other issues
>associated with transfer via a will.

I think you are thinking of yourself and not your children.

>I am not an accountant but I generally understand accounting principles.
>Specifically, my question is how are member capital contributions accounted
>for?

What happens inside Equity remains inside Equity.

> The LLC has no income per se and operating expenses, improvements, etc
>are paid for by capital contributions from the members.

Uh oh, where do they come from?

> For example the
>cabin ownership, itself, was transferred from my wife and me to the LLC.

Nods.

>Member equity in the LLC is based on capital contributions

that is probably wrong, actually, given what you've said above

>but I am unclear
>on how to record the contributions in the LLC books. Any guidance would be
>appreciated.

I'm foreign so I don't have to worry about your legal stuff.  This is 
something you have to agree as a family.


Under Equity create accounts for each of the people involved. Start off 
with the introduction of the cabin and then [1] distribute it amongst 
the others still inside Equity.

-- 
Wm...