[mam_3508]

My company had set up a holding company dealing with education business services. It is 100% owned. The pre-incorporation cost incurred to set up the company was $2500 and paid by my company (parent). Who shoup pay cost, the parent company or the subsidiary? The subsidiary had accounted for it as amount owed to parent. The parent company treated it as expenses to the company. Please help.

[Andy R]

It sounds like you accounted for these costs correctly. The parent company should have this on the books as an asset in the form of a loan to the subsidiary. The subsidiary should then have a liability in the form of debt to the parent company.

If they are both LLCs and you own 100% of both then it could be considered a disregarded entity in which it's all a moot point until you bring on some other partners.