Group partnership: :

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Group partnership: :

Wendy Hernandez

Member since 2019 · 2 posts · 1 vote

How do you divide the profit if its a group of 4 ?

How do you file the taxes?

The LLC would be shared amongst all?

Im new to all this and want to understand these things to go over it with my group.

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Will BarnardPro Member

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Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes

@J Scott provided you great advice, I would follow that.

@Greg Dickerson also gave great advice. A CPA AND attorney would be of vital importance here.

Additionally, your intent with the property will play a huge role in what entity you form and how it is managed. Consult with your professionals on this, don't skip that step, the cost to hire them is much less than the costly mistakes later.

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Greg Dickerson
Developer · Charlottesville, VA · Member since 2018 · 4k+ posts · 4k+ votes
6y
With an LLC you would all be members operating as a partnership. The operating agreement would spell out the roles, contributions and profit splits as well as lots of other details.
You generally would divide equity and profits parí passu in accordance with each partners contribution of time and capital.
The best thing to do would be to meet with a real estate attorney to go over this and draft the partnership documents.
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J ScottPro Member
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Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
6y
For taxes, I would recommend finding a good accountant or CPA. The LLC would file a tax return and distribute k1 documents to each partner for their share of the profits or losses. The k1 income would flow through to each partner's personal returns.
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Dominick Austria
Accountant · Las Vegas · Member since 2019 · 40 posts · 17 votes
6y
There’s handfuls of information we would need to know before being able to answer your question. Are you flipping or hold and renting? Are all 4 putting in equal money? How do you want to split the profits? Is one person doing all of the work and getting a share of the profits? It’s a discuss to have with a tax professional. They will be able to educate you once they have all of the information.
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Will BarnardPro Member
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Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
6y
@J Scott provided you great advice, I would follow that.

@Greg Dickerson also gave great advice. A CPA AND attorney would be of vital importance here.
Additionally, your intent with the property will play a huge role in what entity you form and how it is managed. Consult with your professionals on this, don't skip that step, the cost to hire them is much less than the costly mistakes later.
Podcast Guest on Show #130
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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
6y
@Wendy Hernandez

You may need to consult with an attorney regarding setting up some type of entity.
You should also discuss the operating agreement which will dictate how profit/loss will be split among the partners/members/shareholders.

You have to file a partnership or S-corp return depending on the entity you create. I would advise on reaching to an accountant who is familiar with this.
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