no 1099's. no w-2's unless an S-Corp. then W-2's are required along with the filing of payroll tax returns,etc.
if not an S-Corp
the issue for the members to decide is whether these payments get treated as guaranteed payments or draw/distributions.
in the simplest terms, guaranteed payments are a partnership deduction that reduces the residual income that is allocated to the members (but not the total income). distributions have no effect on taxable income only on basis and at-risk isuues.
simple example 2 members sharing net profits 50/50 after guaranteed payments. $100 of net income before a guaranteed payment to one member of $30. so one member has taxable income of ($100-$30)/2 = $ 35. the other has $35 +$30 or $65
