LLC to LLC cap limit to business transactions?

[aiello]

Hi, just wondering if two LLC totally pass-through entities (single-member, foreign owned, non-etbus) have any annual limit to make transactions with each other.

For instance, I read that such LLC will have to start pay state taxes if the yearly income is more than 300k for single state.

If that's true, the question is if transacting more than 300k between those two entities will trigger taxation

Thank you.

 

[Sols]

There is no limit beyond which LLCs cannot send money to each other. Amounts far greater than 300,000 USD are passed between LLCs all the time.

Depending on state as well as on the financial situation of each LLC, you need to be mindful of not doing things that end up being accounting or tax fraud. The company may also be subject to a higher state fee or franchise tax if it turns over certain amounts. IIRC, the limit is 250,000 USD in California. I'm not sure if that's 250,000 USD of revenue, net revenue, profit, or some other metric, though.

Ask your CPA or, if you don't have one, get a CPA. A tax lawyer also works.