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Updated over 6 years ago on . Most recent reply

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Tax, SDIRAs & Cost Segregation

Someone gave me money to invest. Is it subject to income tax?

Christopher Tritch
Posted

I'm just beginning my real estate career. After hearing my plans, an acquaintance gave me money under the condition that we would split the profits. This money is now in my LLC's bank account.

Does the IRS consider this income? Do I have to pay taxes on this money? 

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Eamonn McElroy#5 Tax, SDIRAs & Cost Segregation Contributor
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Eamonn McElroy#5 Tax, SDIRAs & Cost Segregation Contributor
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  • Atlanta, GA
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@Christopher Tritch 

Agree with @Ashish Acharya, you've effectively created a partnership. Talk to your attorney and tax CPA/EA about creating a new LLC with operating agreement that both your friend and your LLC are members of.

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