The short answer is yes you can use funds from one LLC to invest in other entities. In fact, many people create LLCs for this exact purpose. However, you will want to take a moment to consider each aspect of this transaction regarding tax breaks.
First, you are probably aware that you must pay taxes on any profit made by the LLC. So, if LLC 1 earns X amount of money, you will have to pay the proper amount of taxes which can influence the amount of money you feel comfortable investing in LLC 2. Usually, an LLC is not taxed for the receipt of a contribution, but the contributor may be taxed. Basically, LLC 2 will likely not be taxed for receiving the money, but LLC 1 could be taxed for giving it. You’ll want to examine the tax code very closely before determining how this will all play out.
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