Recent Feedback
(1)Have an LLC with 3 partners - siblings who are full-time students. Activity includes buying homes, making improvements, and selling at a profit. One sale in 2011 and thus far one sale in 2012. Both short-term. Are they all general partners treating sales as self-employment income subject to SE tax?(2)College tuition being paid from LLC. Is this a deduction for the business. Would the tuition deduction be applied to specific LLC member for whom it was paid?HELP PLEASE
Optional Information: State/Country relating to question: Maryland Already Tried: UNSURE
1) Unless the membership agreement states otherwise, all members of the LLC are considered to be general members and as such each one gets a K-1 form (1099 for an LLC member) for their share of the profits/losses of the LLC and each has to claim their share on their income taxes and pay their share of their taxes on their personal income taxes.2) College tuition being paid by the LLC is income to the person whose tuition is being paid so that has to go on their income taxes and it is not a legitimate business expense, it is income to the member receiving it.
I hope you found my answer helpful, but please understand that if you did not get all of the information you may have wanted PLEASE USE THE REPLY BUTTON IF YOU HAVE FOLLOW UP QUESTIONS AND NOT THE FEEDBACK BUTTON FOR BAD SERVICE. PLEASE CLICK ON “OK,” “GOOD” or “GREAT” SERVICE. Kindly remember to ONLY rate my answer when you are fully satisfied. If you feel the need to rate anything less than OK, please stop and reply to me via the or REPLY TO EXPERT button with whatever issue or clarification you may need.
If you have additional questions, please keep in mind that I do not know what you already know or don't know, or with what you need help, unless you tell me. Please consider that I am answering the question or question that is posed in your posting based upon my reading of your post and sometimes misunderstandings can occur. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered.
Also remember, sometimes the law does not support what we want it to support, but that is not the fault of the person answering the question, so please be courteous.
PLEASE NOTE WELL, LEGAL ANSWERS TAKE MORE THAN “MINUTES” TO PUT TOGETHER AS WE ARE DEALING WITH LAWS OF 50 STATES PLUS FEDERAL LAWS, AS WELL AS DEALING WITH OTHER CUSTOMERS, SO PLEASE BE PATIENT IT WILL BE MORE THAN “MINUTES” IN SOME CASES BEFORE YOU GET A RESPONSE, BUT BE ASSURED YOU ARE NOT BEING IGNORED.
There can also be a delay of an hour or more in between my answers because I may be helping other customers or taking a break.
You can always request me through my profile at http://www.justanswer.com/law/expert-paulmjd/ or beginning your question with “For PaulMJD…”
To clarify, the sales would be self-employment sales subject to SE tax?
They must pay SE tax if they have net income from the LLC.