Do I have to pay tax if I don't create an invoice for a company to pay me? The company owes me 70% profit of its trading account.

Forum|Forum|5 years ago
August 7, 2020
3 replies
17 views

I trade for the company's money on it's own trading account. I keep 70% profit and company keeps 30% profit from it's trading account. I don't have any income until I write an invoice and send it to the company for paying me based on how much I ask (similar to withdraw). Do I have to report tax without income while company owes me?

Best answer by TomYoung

Trading somebody else's money and keeping 70% of the profits (while, presumably, not sharing losses) sounds good to me. Where can I find a job like that?

"I don't have any income until I write an invoice and send it to the company for paying me based on how much I ask (similar to withdraw)."

That wording of "paying me based on how much I ask (similar to withdraw)" comes perilously close to the concept of "constructive receipt." While companies and individuals have always played the game of delaying invoices or accelerating invoices for reporting and tax purposes, I guess I'd suggest not pushing that too hard.

Anonymous

what type of company?

sole-proprietorship or single-member LLC

multi-member LLC

S-Corporation including LLC electing such tax status

C-Corporation

aofrozenAuthor

Level 2

That company is registered in the registry of associations of the Municipal Court in Prague. It's type is self-regulatory organization.

Anonymous

do you have an ownership interest in the company? do you have any control such as the ability to write checks for the business? if the answer to both is no, then the lack of control would mean you report your earnings when you receive the payment.

aofrozenAuthor

Level 2

Both is no.

Carl

Level 11

Income is reportable as such in the tax year you receive it, or in the tax year when you have control of it - whichever occurs first.

TomYoung

Answer

Alumni - Champ

Trading somebody else's money and keeping 70% of the profits (while, presumably, not sharing losses) sounds good to me. Where can I find a job like that?

"I don't have any income until I write an invoice and send it to the company for paying me based on how much I ask (similar to withdraw)."

AmeliesUncle

Level 15

As Tom indicated, you need to send the invoice in a reasonable amount of time (such as monthly). If the invoice is not sent in a reasonable amount of time, the courts have rules that you have had "constructive receipt" and owe taxes on it whether or not you actually received the money.