Need suggestions

[bstaxes]

Taxpayer has 2 LLC both sch c. Customer has bill with LLC B and wants to pay with equipment that LLC A can use. TP need to pay for the supplies used for customer in LLC B.

Accounting and tax question can LLC A issue check (made to cash) to pay for equipment then LLC A can depreciated it. Then can that check be giving to LLC B for the bill that is owed to LLC B. I think this will work, then LLC A can depreciate equipment and LLC B can then pay for supplies.

Or any other suggestions?

Thanks

[mcb39]

If I read you right, why not just let LLC B accept the equipment as payment for the bill. Then B should sell the equipment to LLC A. The check should not be made out to cash. It should be recorded as a sale so that B records the money as income. B can then pay for the supplies and record the expense. LLC A will own the equipment and can depreciate it as a proper purchase. I think you are making it more difficult than it has to be. I do understand that you don't want to report the income twice and, of course, you shouldn't. The first transaction isn't really a purchase as it is an exchange. As long as you don't record the income twice, there should not be an issue.