We have a partnership where there are no guaranteed payments. Are we able to issue a 1099 to each partner based on specific contract related work that was performed, and the remaining gain of the partnership be partnership distributions? Or does all income have to be reported/filed as distributions? The partnership has hired multiple independent contractors for the same type of work that the partners have done sometimes. Is it possible for a partnership to hire the partners themselves as independent contractors? Or does that violate tax law?
Regardless of the answer, where do we report partner distributions on the 1065? Are these payments deductible at all if they aren't guaranteed payments?
