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Ask Chad Oberg Your Own Question
Chad Oberg
Chad Oberg, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 174
Experience:  10 + years of accounting and tax experience, financial statements and business planning
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I am a partner in 8 different businesses. I get income after

Customer Question

I am a partner in 8 different businesses. I get income after profits are determined each month. At the end of the year, I get K-1s on each business. The businesses are each their own entities-LLCs mostly. The businesses are located in each state, and I travel about two weeks out of every month to manage the businesses. I do not get reimbursed for the travel through the corporations. What is the best arrangement for me, tax-wise? Should I file a personal return and deduct my business expenses? Or should I have a separate corporation that serves as a pass-through; that is, which receives the profits from the corporations, and pays me?
Submitted: 7 years ago.
Category: Tax
Expert:  Chad Oberg replied 7 years ago.

Customer,

 

If you deduct the business expenses on your personal return, you will probably be subject to limitations on you Schedule A. However, if you can set-up a company that has a business purpose (other than just deducting your business expenses) you would be able to deduct expenses such as these.

 

You could have a company such as an advisory company. You would need to find a way to book income to offset the expenses. A company shouldn't continue to loose money year after year or it may start looking suspect. Would the LLC's consider paying you an outright consulting fee that diminishes your K-1 returns?

 

Please let me know if you have any further questions. My firm services many clients that have similar circumstances such as yours.

 

Regards,

 

Chad

Chad Oberg and 3 other Tax Specialists are ready to help you
Customer: replied 7 years ago.
Are you located in Texas? I reside in Texas, but some of my businesses are elsewhere, such as NM, Nebraska, and Arkansas. Offsetting the K1 income with a consulting fee shouldnt be a problem.

I also own another business-a franchise-without any partners, and it is set up as an LLC.

I'd be interested in seeing how perhaps your group and I might be able to do business.

Thanks

Paul