A company I own and an individual have a partnership. There is no legal entity for this partnership, but a verbal agreement to split all profits, losses, and taxes
We purchased, fixed up, and resold a condominium unit for profit. We purchased the condominium for $6,500, sold it for $37,000, and will realize a profit of approximately $22,000 after all costs and fees are subtracted. We performed the majority of work for the fix ourselves.
The purchase and sale are in the name of the company, and the individual is neither on the deed nor a member of the LLC.
I am wondering the best way to minimize our tax burden, as well as the proper forms to use to report this. Again, each of us should pay 50% of any tax burden if it ends up being capital gains.
Also, it is my understanding that it may be possible to make this income tax
/ self employment tax rather than capital gains. If so, is this advisable, and how would I set that up?
Thank you for your help.