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I run a small software consulting company. It is organized as a LLC in California, filing as an S-Corp.

I want to start a second business, but something unrelated to computers. I will need to purchase equipment to start the new venture.

Can I simply make this a new division of my existing company, and write off the equipment purchases as a business expense in the same way I would if I was buying equipment for he existing operation?

If the answer is no, what if they were proximately related? Where is the line drawn typically?

Drew Goodwin
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  • And your accountant says ... ? – Dale M Jan 07 '16 at 23:42
  • There is nothing that says a business can't be in two unrelated industries. Coors, the makers of the world's worst beer also makes Coors-tek ceramics, some of the highest quality refractory materials. You should be careful in structuring such a venture, but ask your accountant and they can advise you how to do it properly without facing embezzlement charges later in life. – A. K. Jan 09 '16 at 05:58
  • One accountant told me today that the new venture should somehow do work in the same NAICS code as the existing business. For example the new venture is woodworking, I could produce some sort of online content to go along with it. Still searching for a more complete answer. – Drew Goodwin Jan 10 '16 at 07:04

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