Question, I don't even know how to title this

I am in the process of going pro and so I am starting my own LLC. I've taken out a 10k loan, $7500 of which is for new gear and equipment that will be enough to work a wedding I have booked in August. I also have a couple of smaller jobs before then. The rest of the loan amount is to give me some cushion while I am starting up. My monthly bills for everything including the loan is under $500. My husband wants me to pay him back for the prior things that have been bought for the photography, which he then wants transferred into the business as business assets. Has anyone else done this? I understand it's just swapping things around but I'd rather not use the loan funds to pay ourselves when I haven't even officially started.. basically he was saying that I owe him that money back. Help.

I'm not in the US, so don't rely on this (free) advice.

There is nothing inherently wrong in a company purchasing assets from directors or shareholders, so long as the transaction is transparent and the price paid is full market value. 'Market value' is a slippery term, but the best guide for used gear would be what that gear goes for in the used market where you live.

I'm not sure that the legality of a business asset purchase is your real problem, though. If that money is needed for the business to progress, then paying it out to yourselves for gear that you already have doesn't sound like the best long term move.

Does his proposal amount to this: he wants to turn a gift into a sale?

OhLook wrote in post #18039763
Does his proposal amount to this: he wants to turn a gift into a sale?

Yes I know. The amount he is requiring includes all past photography related purchases (excluding my current consumer-level camera and lenses at my request) which is not a small amount. Even the course I'm currently in he wants reimbursed.

This is upsetting to me and I'm rather nervous at this point. He wants to help me keep the books but I'm shocked I was supposed to give us 3k when my loan gets deposited into our account.

atsilverstein wrote in post #18039780
I'm shocked I was supposed to give us 3k when my loan gets deposited into our account.

On the basis of your past posts about your husband, I have a strong suggestion. Open an account of your own. Don't use the household joint account for your photography business. There are big issues here involving control: control of money and control of your business activity.

OhLook wrote in post #18039784

atsilverstein wrote in post #18039780
I'm shocked I was supposed to give us 3k when my loan gets deposited into our account.

On the basis of your past posts about your husband, I have a strong suggestion. Open an account of your own. Don't use the household joint account for your photography business. There are big issues here involving control: control of money and control of your business activity.

He will completely lose it if I do. He has already accused me of trying to screw him over when I balked at paying back the prior photography monies. If I open up a separate checking account and transfer out the money and simultaneously buy all my gear on one of the joint credit cards I know full well I have to be prepared for the worst case scenario.

If you are going to list gear previously bought as a business asset and then list them as depreciating items for tax purposes each year I'd really get some accrual fiscal advise from a tax accounting to avoid any future issues. As for having to pay back your husband for historical purchases..... well honestly thats just not supportive at all.

atsilverstein wrote in post #18039790
If I open up a separate checking account and transfer out the money and simultaneously buy all my gear on one of the joint credit cards I know full well I have to be prepared for the worst case scenario.

Transfer out what money? I just mean: open an account in your name only, deposit the loan amount into that account when you get the funds, and use it to buy gear. If you're conducting a business as an individual, not as a partnership, your husband shouldn't be making the decisions. He's not an owner.

I fail to get his logic about wanting to be paid back for your current equipment. Don't those items belong to you?

OhLook wrote in post #18039809
Transfer out what money? I just mean: open an account in your name only, deposit the loan amount into that account when you get the funds, and use it to buy gear. If you're conducting a business as an individual, not as a partnership, your husband shouldn't be making the decisions. He's not an owner.

I fail to get his logic about wanting to be paid back for your current equipment. Don't those items belong to you?

The loan is already processed and is slated to be put in our joint checking account. I am waiting on the EIN number any day now so I can open a business bank account. Since I don't have a debit card, I'll have to use credit to make the purchases. Plus I think he wants the business to pay us while we pay the credit card. I know, and now my head is spinning, plus I'm upset about all of this. I just want to get it off the ground so I can move forward with my life.

Yes I know I am the business owner, and I'm trying to walk a very fine line of asserting myself and my needs but not offending him either. So far I am not succeeding.

I would not try to do what your husband is suggesting you to do unless you run it by a CPA or a tax lawyer.

What it sounds like he is suggesting is that you "give" him all the photographic equipment so he can "sell" it to your business. It may be possible to do this, but I sure would want to do it properly. It sounds to me like something that would likely get your business audited if not done right.

Edit: The IRS allows you to convert personal assets to business assets. That is how you would have to claim expenses on the camera equipment you already own. As for giving him money, basically, if you give your husband $3,000.00, it would not be a business exchange, it would be a personal exchange. Being his spouse, it is not even giving him money, just giving him the right to be the one to decide how to spend it.

Nogo wrote in post #18039827
I would not try to do what your husband is suggesting you to do unless you run it by a CPA or a tax lawyer.

What it sounds like he is suggesting is that you "give" him all the photographic equipment so he can "sell" it to your business. It may be possible to do this, but I sure would want to do it properly. It sounds to me like something that would likely get your business audited if not done right.

Edit: The IRS allows you to convert personal assets to business assets. That is how you would have to claim expenses on the camera equipment you already own. As for giving him money, basically, if you give your husband $3,000.00, it would not be a business exchange, it would be a personal exchange. Being his spouse, it is not even giving him money, just giving him the right to be the one to decide how to spend it.

The problem is that it is not just the gear and cheap studio he wants reimbursed, he is also including money spent on my photography course and (and I assume now, its full cost in the future) all the start up costs of the business (Legalzoom, website, etc). He is planning on (and expecting to) suck out the blood from my business before it is even born. I don't see how this can end well. If I go along with it, I'm just exacerbating the problem, not setting boundaries, and not standing up for my needs. But if I do anything significantly different from what he wants me to do, I don't even want to think about it. He will see it as an act of betrayal. It's been a very rough couple of years. This may be what breaks the camel's back.

Just reading your edit.. I knew it didn’t make sense and that it has to do with his sense of control over me. I don't want to do it. I have to weigh the risk of not going through with it. He is not someone who is easily reasoned with. It just sucks for me because I don't have any family around me to go to in case the sh!t hits the fan.

Nogo wrote in post #18039827
What it sounds like he is suggesting is that you "give" him all the photographic equipment so he can "sell" it to your business.

I'm not sure. To me, it sounds more like he's claiming that he already owns the equipment because he paid for it initially.

atsilverstein, at this stage, can you get the loan funds deposited into another account? Using the joint account for that purpose is a bad idea. It may someday be important to establish whether this money was commingled.

OhLook wrote in post #18039859
I'm not sure. To me, it sounds more like he's claiming that he already owns the equipment because he paid for it initially.

atsilverstein, at this stage, can you get the loan funds deposited into another account? Using the joint account for that purpose is a bad idea. It may someday be important to establish whether this money was commingled.

No I don't have a separate account. I'd have to open a new checking account and then deposit the loan into it. Yes I realize that. But even more so because he wants to use the remaining cash. I don't care if it's to pay down our credit card debt, it's the principle of it that upsets me.