Can llc pay a partner for gas used in rehab of house for flipping

[cdrisom]

My partner and I purchased a house for flipping.  He's a Realestate broker and used his truck to transport materials for the repair of the house.Can the llc pay him for gas used?

[Vanessa · Accepted solution]

Yes, the LLC can reimburse a partner for gas expenses.

[cdrisom]

Does he have to give the llc any documentation before being paid?  Is it income for him?  Is it a deduction for the llc on the 1065?

[Vanessa]

Yes, he needs to give the LLC receipts. No, it is not income to him. Yes, it is a deduction for the LLC on the 1065.  

[cdrisom]

Thank you.  If he is just requesting $100 a month does he just have to give me mileage logs?  

[Vanessa]

He can't request a flat fee for reimbursement or it would become income to him.  You need to determine if you want to do mileage or receipts and then reimburse based on that.  But it needs to be accounted for.

[cdrisom]

Thank you.  If we do mileage, he will have to provide a mileage log, is that correct.  

[Vanessa]

Correct

[cdrisom]

What kind of receipts does he need to give me.  Gas receipts? How do I distinguish between gas for the LLC and gas for his Realestate business and gas for personal?