Partner's 1099s in sale

[Brian Sorensen]

I'm selling a flip for $230,000. I have some partners but the house is in my name. Upon sale of the house, should we each put one third of the 230,000 on our 1099s or should my partners just put the amounts they are each receiving and put the rest (the majority) under my name? I don't have an accountant available that I can ask.

Thanks!

[Steven Hamilton II]

Brian Sorensen,

The correct way for it to be done is: You should get an EIN for a partnership. This way they can report the closing to the partnership and then you can apportion the profit accordingly on the K-1s issued to each partner.

There are many reasons for doing this as it can help limit audit potential for you personally. You will show the full investment into the business and it will show what is taxable and what is not to each partner.

How the IRS sees it: The moment you agreed to work together you verbally formed a partnership and a Partnership Return(Form 1065) must be filed.

If you want any clarification on this just let me know.

-Steven