No receipts for reimbursements

USA Discussion in 'General Accountancy Discussion' started by Kelly Smithson, Dec 31, 2018.

  1. Kelly Smithson

    Kelly Smithson

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    A client started an LLC in 2018. An Angel investor paid for his business Filing, website, website hosting, and other general expenses. The initial understanding was that he would be an equal partner, and get reimbursed for all his expenses. Only my client’s name appears on all business filings, bank account, etc. He (Angel) has been asked numerous times both orally and writing to submit receipts and invoices, but he has refused. Now, he says that he doesn’t want to pursue the relationship any further with my client, and the client should just keep everything for himself. My client wants to pay him back in full as originally agreed, and file all proper tax filings. What should he do? Should he make a goodwill estimate of the expenses and just write the investor a check? It is a real mess.
     
    Kelly Smithson, Dec 31, 2018
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  2. Kelly Smithson

    bklynboy VIP Member

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    Why pay it back if he does not want anything? Since the company never incurred these costs I don't see why you need to include these in your tax filings assuming all the legal paperwork is in order for the LLC. If you really think at some point he may come after the LLC for repayment, set up a receivable using your best estimate what he is owed but I would not pay anything without proper invoices or receipts.
     
    bklynboy, Jan 2, 2019
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