I just want to clarify a statement that has been made which indicated an LLC can allocate its income any logical way it wants.
That statement is not accurate.
Partnerships and LLC's taxed as partnerships must allocate their income in a manner that is in accordance with very complicated regulations which indicate that income must be allocated in accordance with the substantial economic effect rules. These rules are very complex. So the bottom line is you either need to have a tax professional model out your allocations, and include this modeling language in your operating agreement, or you must allocate your income in accordance with a partner / member's interest (also known as PIP - partners interest in the partnership).
I will also recommend you consult with a tax professional in helping you determine what is best for your structure. Most of what you want to accomplish I believe can be handled through guaranteed payments and then allocate the income based on the member's interest. But once again, seek some assistance.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
