Profit Sharing and Tax Responsibilities...

[Leslie Zhang]

I have a new real estate investment company that has a 50/50 or 40/60 split with my investors.

My question is, if I pay the investors out right away, they would receive their portion pre-tax. Will I have to pay the taxes on the amounts given to the investors at a later time, thereby diminishing my own returns?

To make matters a little more complicated, both myself and the investors are Canadian (although, on of the partners in the investment company is a US citizen as well).