USA Properly Handling Member "Purchase" of LLC Inventory


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In a Single Member LLC using pass through taxation, what's the correct way from an accounting and LLC legal perspective, for the owner to "buy" inventory (of the owners choice) from the company for their personal usage. I'm thinking it needs to be an arms-length transaction (buying the item just like any customer would) but do I buy it at the price the LLC paid for the item, or Fair Market Value (which could be more or less than the LLC originally paid). I want to do it right from an accounting perspective, and from a legal perspective with respect to preserving the LLC's shield and LLC's independence from the owner. Thanks very much!

PS: This is a wonderful forum, have found many answers to questions in the past. My first post, Thanks in advance for your help!
 
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kirby

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For acctg, buying at cost acts to prevent LLC from showing a gain or loss on the owner's transaction.
 
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Thanks for your response - though I'm not sure I completely understand - the owner buying an item at the original item cost to the LLC (higher or lower than the present fair market value) would be the correct or incorrect thing to do? Thanks!
 
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kirby

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Owner buying at LLC cost is the correct thing to do as then LLC shows no gain or loss from owner’s transaction.
 

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