Family funds

[Amy Prosser]

I went together with a family member to flip a house. They provided the funds, I provided the labor. Due to a profit smaller than hoped for, they let me have the $8,000 profit, and I reimbursed them for their investment, as well as covering the payments for their home equity loan. No interest or profit was paid to them. Where do I report this on my taxes on Schedule C, and is there a need for 1098 or 1099INT?

[Rob Beland]

Shake their hand, thank them for their help and move on to the next deal. (Not what a CPA or the IRS would tell you of course) Report the profit as you normally do, pay the taxes.