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Updated almost 6 years ago on . Most recent reply
Taxes from personal to LLC
Hey guys and girls, My grandpa and I recently bought our first rental with Basically with cash ( he carried a small note something like 20k). We create an LLC to run the rental and control the finances and such, the LLC collects 1300/ month in rent and then pays my grandpa 1100 back to pay him back for the investment. (This also covers taxes and insurance on the property). I over arcing question is is the 1100/month payment to my grandpa taxable income to him?
Thank you very much!
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If the $1,100 is going only toward principal then there won't be any taxable income. If some portion of that $1,100 is interest then the interest will count as income.