Need help figuring out how my business partner will be taxed.
Hi,
I have a business partner who has provided money to my LLC, which I will use to invest in real estate. The agreement is that I will do the work and give them a percentage of the profits. I'm trying to figure out how they are going to be taxed.
When I give them money, are they just going to pay basic income tax? Will they be subject to self employment tax? I may be engaging in seller financing. If this is the case, they will be receiving monthly payments from my LLC. Would this money be subject to capital gains tax?