Claiming income for our rehab labor, through our construction Business

[Trisha S.]

We need to claim more income to move forward with real estate. We would like to claim our labor on the last two houses completed in 2014; 1830 E. 7th Street and 815 N. 12th Street. We refinanced these properties and would like to pay ourselves for the labor through our construction business. We were wondering if we just needed an invoice, and payment tracking. Are there any other things we should be doing to insure proper documentation?

[Aaron McGinnis]

The construction corporation does pay me, just like any of our other employees. Doesn't matter if we're working on one of our own flips or a renovation for someone else. 

If you're an officer in the corporation, the IRS will want to see you getting paid "Appropriate compensation" 

The biggest question mark is what the best vehicle for you to get paid is... 1099, W2, or other. Without knowing the specifics of your situation, it's hard for anyone to say what's going to work best for you.