Taxes On Assignment Of Contract. LLC.
I hope someone can help me out with this question, for im not the greatest with taxes yet. today me and my partner just closed on a house that we did an assignment of contract on. the assignment was from both our LLCs but the price was just one lump some of 21,000 we asked the lawyer if they could cut us two checks for 10,500 a peice but they said they couldnt because of the contract didnt state that. so for some reason the check was cut for the lump some to my LLC i guess they had to pick one.
now what where thinking is that if i cash the check, then i will have to claim that 21k as income, so i guess i will just give my partner his half in cash and he will pay me the taxes on his half of the 21k. now i dont know how to go about finding out what he will pay me, because this 21k plus what i should be making in the next week will put me in a higher tax bracket then him and i will be taxed a higher percent and he wont be taxed anything on this 21k (we will also be splitting the next deal, which we will be cut two seperate checks). any help on what to or any advice on other ways to structure this would be very helpfull. i know i need to talk to a C.P.A. and will tommorow but i would def. like everyones input anyways. thanks
[ Edited by ZinOrganization on Date 11/01/2004 ][ Edited by ZinOrganization on Date 11/01/2004 ]
nevermind, i think i figured it out. i will just cut a check for half the 21k to his buisiness acount and make a copy of the check and then deduct it as a buisness expense. let me know if this sounds right. dont know why i didnt think of this earlier.
You can probably give him his half and 1099 it or some such