The company itself · A term for founders abroad
What is a capital contribution?
Money or property an owner puts into their company, including company costs the owner paid personally; reportable on Form 5472 from a foreign owner.
Checked against the IRS's instructions and the states' own rules. Reviewed by Saais Patel, compliance reviewer.
Term 15 of 105 in the glossary, filed under C.IRS: instructions for Form 5472
Capital contribution, for a founder abroad.
Money you put into your LLC is a capital contribution: the state fee you paid, the deposit that opened the bank account, software you paid for on your own card before the account existed. It increases your stake in the company rather than being income to it.
Record each one on the date you paid it. For a foreign owner, contributions are reportable transactions on Form 5472. If you'd rather be repaid, lend the money instead and write a short loan note; a loan is reportable too, and its repayments aren't distributions.
Sources: IRS: instructions for Form 5472.
Read next · guide · 3 minKeeping the company's money separate from yours: why it matters and how to do itWhat founders ask next.
- I paid my LLC's formation costs personally. What are they?
- Capital contributions, each dated the day you paid it. The guide to separating money shows how to record them.
- Is a capital contribution taxable to the company?
- No. It's the owner's investment, not income.
03 · See also
- The company itselfDistributionMoney an LLC pays its owners from the company; how the owner of a single-member LLC pays themselves, reportable on Form 5472 from a foreign-owned one.Read the term
- The EIN and IRS formsReportable transactionAny exchange of money or property between a US company and its foreign owner that goes on Form 5472, including the money used to form the company.Read the term
- Money, sales tax and addressesComminglingMixing a company's money with its owner's; the most common way an LLC's owner loses the liability protection the LLC exists to provide.Read the term
- The company itselfLLCA US company whose owners aren't personally liable for its debts, and whose profit is taxed once, to the owners, unless it elects otherwise.Read the term
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