thank you. to clarify, the scenario is like this
we are basically an electrical contractor (solar) business and both of us have other regular jobs with tax witholdings. so this LLP is for supplemental income.
let's say we do 3 jobs a year. each job could be like this:
sell a system for $20,000
cost for materials, labor, everything on the system is $14,000
there is $6,000 leftover
we each take $3,000 out of the account and put it in our pockets
repeat for 2 more jobs in the year. that's it
so at the end of the year, we each took $9,000 out of the account which is income and must get reported.
it sounds like, you are saying:
1) that $9,000 is not guaranteed payments, it is profit of the business, that we split 50-50.
2)The fact that we took $9,000 out is irrelevant. It could sit in the business account, or we could take it out. we pay taxes on 50% of the business profit either way.
if I enter everything in correction to Turbotax Business (put 0 for guaranteed payments) then it will issue K-1s for us properly.
i really appreciate it
gary in vermont
