How to Properly Report LLC Earnings from YouTube Channels Through Multiple Business Structures

What you've got is a fairly common multi-entity structure, though you need to make sure you've got proper documentation in place. The IRS will want to see that these are legitimate business transfers, not just moving money around to avoid taxes. For documentation, you should maintain: 1) Clear operating agreements for each LLC that outline their business purpose and relationship to each other, 2) Formal contracts between the LLCs detailing the terms of fund transfers, 3) Board meeting minutes documenting decisions to transfer funds, 4) Detailed bookkeeping showing the business purpose of each transfer, and 5) Separate bank accounts and financial records for each LLC. As for taking a salary from the holding company, yes, you can do this, but it adds another layer. You'd need to set up payroll, withhold taxes, and issue yourself a W-2. Many business owners find it simpler to take owner's draws instead, but this depends on how your LLCs are taxed (i.e., whether they're disregarded entities, S-Corps, etc.).

I was trying to sort out a similar situation with my freelance video production business last year and became completely overwhelmed with the documentation requirements. I ended up using this AI tax assistant at https://taxr.ai that specializes in complex business structures like yours. It analyzed my LLC setup, identified the exact documentation I needed for transfers between entities, and explained how the IRS would view my arrangement. The coolest part was that it flagged a potential issue with how I was documenting business purpose for transfers between my companies - something my regular accountant completely missed. It also helped me understand when transfers might trigger unexpected tax consequences that I hadn't considered.

Wanted to follow up about that taxr.ai service mentioned earlier. I finally checked it out for my e-commerce to real estate LLC structure, and it was seriously helpful. Within an hour, I had specific documentation templates for my inter-company transfers and a clear explanation of how to properly record transactions between my businesses. The system flagged that I was missing operating agreement language about permitted fund transfers between entities, which apparently is super important for establishing legitimate business purpose. It also identified that some of my transactions could be structured better to avoid potential re-characterization by the IRS. My CPA was impressed with the documentation guidance and said it would definitely strengthen our position if we ever got audited. Definitely worth checking out if you're dealing with multiple LLCs like the original poster.

One thing nobody's mentioned yet is how frustrating it is trying to get clear answers from the IRS directly on multi-entity structures. I spent WEEKS trying to get through to someone who could actually help with my situation (3 interconnected LLCs in different states). After being on hold for hours and getting transferred around, I finally used https://claimyr.com to get a callback from the IRS. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c Within a couple hours, I was speaking with someone who could actually address my specific questions about documentation for fund transfers between related LLCs. Saved me so much time and frustration compared to the endless hold music.

I need to eat my words from my previous comment. After another failed attempt to reach the IRS yesterday (3 hours on hold before getting disconnected), I broke down and tried that Claimyr service. I honestly expected it to be a waste of money, but I got a call back in about 90 minutes connecting me with an actual IRS agent who helped clarify the documentation requirements for my multi-member LLC situation. The agent confirmed I needed to keep detailed records of all inter-company transactions, maintain minutes documenting business purposes for transfers, and have formal agreements between related entities. They also mentioned that taking a salary from a holding company is perfectly fine as long as you're performing actual services for that entity and running proper payroll. Instead of burning another day on hold, I got my questions answered and could get back to work. Consider me surprised that it actually delivered as promised.

One detail that hasn't been mentioned is how your LLCs are being taxed. Are they all pass-through entities or have any elected S-Corp status? For YouTube income specifically, if the content-creating LLC is a disregarded entity, that income passes directly to you (or the holding company if that's the ownership structure). If it's an S-Corp, you need to pay yourself a reasonable salary from that specific entity before moving profits elsewhere. The documentation requirements can vary significantly based on tax classification. Each entity needs its own accounting records, but how they report to the IRS depends on their tax treatment (Form 1065 for partnerships, Schedule C for sole proprietor disregarded entities, 1120-S for S-Corps, etc.

Curious about the property services side - are there any Section 179 deduction implications when using YouTube earnings to purchase equipment for an unrelated business? I'm in a similar situation where one business is funding equipment purchases for another.

This is a great discussion on multi-entity structures! One thing I'd add from my experience with similar setups is the importance of maintaining arm's length transactions between your LLCs. Even though they're all disregarded entities for tax purposes, you still want to document that any services or fund transfers between entities are at fair market rates. For example, if your holding company is providing management services to the YouTube LLC, document what those services are and that any management fees charged are reasonable compared to what you'd pay an outside company. Same goes for any loans between entities - use proper loan documents with market interest rates. Also, since you mentioned substantial income ($175k), consider whether making an S-Corp election for any of these entities might save on self-employment taxes. With that level of income, the salary vs. distribution optimization could be significant, but you'd need to weigh that against the added complexity of payroll compliance. The key is having a legitimate business purpose for your structure beyond just tax planning. Sounds like you do with the different industries, but make sure that's well-documented in your operating agreements and business records.