equity for venture capital business
by VCfreedom, Performer
- Created: December 28, 2009, 3:59 pm
I have been spending a lot of time investing a large portion of my money for the long-term. I have been doing very well and now I would like to use my appreciated securities to start a business and continue investing, but now in the form of a proprietorship with a business name. I eventually hope to turn the business into an LLC, however right now, i will not have any liability, and want to build up performance and equity in my company name for future ventures. However, I have some further quesitons about starting this small business as a venture capitalist or angel investor. (Also, i am open to any suggestions about anything i have previously stated...)
1. As startup capital for my business (a sole proprietorship), would I be able to transfer my own current individual brokerage account into a small business borkerage account without cashing out my appreciated stocks?
2. At the time of start-up would I have to report any capital gains on my taxes if I performed this transfer? Or would the basis on my stocks just resume and continue from when i originally bought them? Then when i do cash them out I would just pay tax on capital gains under my business (which would really just pass-through to me...?) Is this correct?
3. Would I have to pay Self-Employment Tax on the Capital Gains and Dividends that my company makes due to holding/selling these securities as I continue to invest within my small business? Or is SE Tax only for a business that is primarily selling goods?
4. Laslty, as I do business, would I be able to transfer money (equity or income after taxes) out of my small business in order to use the money for personal needs, since I am the sole owner of the company? Are we treated as one?
Okay, well any feedback that I can receive would be greatly appreciated. I am new to starting a real business, but very excited to do it and do it right.
Thank you very much!
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