Hello,
I own 2 condos in the name of an LLC, and rent them out. My neighbors also own a condo in the same complex, and we collect rents for them and pay some expenses on their behalf. We do not charge them for this. All of the profit after expenses is given straight to them. Here are my beginner questions:
1) Should we give them a 1099?
2) Should the rent that we collect on their behalf be included in our "Gross Sales"?
3) Likewise, should the expenses that we pay on their behalf be included on our 1065?
4) If rent and expenses are included on our 1065, how do we deduct the profit that goes to them? It is not really an "expense"...
It seems like as all of this is a wash for us, then we could just ignore it for tax purposes, and only include items on the 1065 that belong to us. Is that wishful thinking? Does my favor to them in helping to manage their property then obligate me to do the additional accounting?
Thanks for your help!
