If someone originally loaned you $5K and then received $6K when you flipped the property, issuing a 1099 for $6K could cause them to pay taxes on the full amount, rather than just the $1K profit they earned.A cleaner way to structure this might be to have them buy into the partnership instead.

Trevor is correct that the standard used to sit around 6%, but those days are changing — everything is negotiable now, and I’m willing to reduce and walk you through a strategy that positions you for a win.I’m confident in the level of service I provide, and I value building partnerships where your properties close at the maximum price possible.

Partnerships = Rocket ships. 

It is always good set out with a good plan while working with someone that has been doing it for years either by internship/mentorship, or by partnership.

However, if you're determined to get a deal, I'd recommend doing a lot of the sweat equity and contributing a meaningful monthly amount to show your commitment to the partnership 

Quote from @Lakita Woodson: Quote from @Michael Smythe: LLC's are overkill for most investors.Best for LLC Partnerships, where members want protection from the actions of each other. 

His share of the profit can be reported on a 1099 if it’s structured as a simple investment return, or on a K-1 if it was set up as a partnership.

Quote from @Garry Lawrence: I would talk with an attorney for this type of partnership.

Once she is formally included in the partnership, she should be designated as a general partner.

Such depth ensures more stable partnerships and better aligned investment outcomes.If you'd like to discuss further, we're happy to help.