How is a private capital investor taxed on a deal?

[Brandon Rush]

Hello Investors!!!!!! (And CPAs)

So I did a presentation the other day regarding passive investing and one of the attendees had a question regarding how are they taxed if they are part of a deal and acting as a silent partner. My response was, if they gave a loan, the interest they gained on that loan would be treated as taxable income. If they were to receive a portion of the profits from the sale of a flip, that profit would be treated as taxable income as well. Basically, if they make $100k a year from their W2 and earn another $50k from our partnership through interest and sale profits, their taxable income would now be $150k. I know there are deductions that would be taken out, but just keeping it at a very basic level here. 

The other part of the question was if I am living in New York State and wanted to go in on a deal with you on a property in Connecticut, how am I taxed. I told them from my understanding, you would have to pay taxes in the state in which your investments are taking place. So if they live in New York and invest in Connecticut, they would have to pay Connecticut state taxes on their income along with federal taxes. They would then get a tax credit from New York, so they do not have to pay those same taxes for New York State.

Lastly, I told them I am not a CPA and would advise them to speak with theirs prior to joining us on any deals. 

If you are either experienced with this or are a CPA who has active knowledge on this topic, can you please let me know the details of these questions that were asked? Yes, I have Google this question and looked it up, but I want to start a fresh conversation in case anything has changed in any tax laws.

Thanks in advance!