Well, startup costs must be amortized over 15 years unless they are under $5000 in which case they can be expensed. If each person put in some money but it was reported as a sole prop by wife with a 1099-MISC for friend, does that allow friend to account for their share of startup? Or does wife expense it all?
Also, it leaves the ownership tangled up, which still needs to be fixed ASAP.
If this is a partnership, regardless of corporate registration, is there a reason they can't still do a 1065? That would be more correct than a schedule C with 1099 workaround.
