Hi, apologies in advance if this question has been asked before.
First some background. I am considering partnering with a friend, who happens to be a skilled builder/rehabber, on flipping homes together. We are considering: me purchasing the properties under my name (I have good credit, he does not), him putting up costs and managing the work up to the amount of the downpayment, then we split costs if above that. Then, once home is sold, we split profit (net proceeds minus costs).
My concern: since I would need to be the one to personally guarantee the loan, i suspect i can't have him on the LLC (I;d get one to protect my and my family's personal assets). So, I am thinking when all is said and done, the profit will flow to my personal tax return. How do I exclude my friend/partner's split from my tax bottom line? Do I issue him a 1099 of some sort? Something else?
Would love to hear some perspective from those in the know. Thanks in advance.
