Pardon the ingorance, but as they say, nothing ventured, nothing gained. First-time business owner and excited/scared as heck at the same time. 
A bit of info: Over the course of 2011, the company's first year in business, I contributed $4,700 in out-of-pocket expenses that I booked to my Due to Member account. Additional costs were incurred (funded by an outside loan) that resulted in a net loss of $40K for the year.
Here comes the ignorance...Questions:
1. In closing 2011, is it proper to reclass my Due to Member account balance of $4,700 to my Equity account?
2. How do I treat my $40K NOL:
a) Can I deduct a loss on my personal return up to my $4,700 Equity basis, thus zeroing out my basis?
b) Will this subsequently reduce my NOL to $35.3K? If so, what JE is used to do such?
c) How should I present/carry this remaining NOL? Negative Retained Earnings???
Thanks in advance,
sbsparrow
A bit of info: Over the course of 2011, the company's first year in business, I contributed $4,700 in out-of-pocket expenses that I booked to my Due to Member account. Additional costs were incurred (funded by an outside loan) that resulted in a net loss of $40K for the year.
Here comes the ignorance...Questions:
1. In closing 2011, is it proper to reclass my Due to Member account balance of $4,700 to my Equity account?
2. How do I treat my $40K NOL:
a) Can I deduct a loss on my personal return up to my $4,700 Equity basis, thus zeroing out my basis?
b) Will this subsequently reduce my NOL to $35.3K? If so, what JE is used to do such?
c) How should I present/carry this remaining NOL? Negative Retained Earnings???
Thanks in advance,
sbsparrow