Tax Implications for a 1099 Flip Project Manager

[Josh Wilkerson]

I am in the process of flipping a house with my brother where he is acting as the project manager for the flip. I intend to pay him a % of the profits when we sell but I am unsure on how I should treat the tax liability. He doesn't work for my company and will be a 1099 contractor on the job. For this example, let's assume I have to pay 30% in capital gains and I stand to make 100k total, and intend on paying him 20% of profits for the PM work. Should I be pulling out 30% of the total 100k before paying him his 20% or would I not be liable for the 30% against his share? I dropped my thought process in below. 

Gross Profit: $100k

Capital Gains Liability: $30k

Net Profit: $70k

80% Share: $56k

20% Share: $14k