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    0 Replies Latest reply on Nov 5, 2010 6:33 PM by PinBoy27

    LLC Income with Passive and Active Partners

    PinBoy27 Newbie
      I have an LLC (filing as S-Corp) with a 50/50 partner. I'm active and he is passive. I'm the only one bringing business to the company as an employee delivering a contracted (corp-to-corp) business to the company. I pay myself a resonable income (W-2, taxes, etc) half of what i'm bringing to the company as a contractor to another entity. At the end of the year, i expect the company to have a substantial income (less compensation, expenses) based on the revenue i bring to the company.

      My question now are the ff:

      1) is it OK to do distribution to pay myself more and up to what level (is it OK to even it out so we have it at our investment level)?

      2) what will happen to our Schedule K-1, is it required to give one to my passive partner since i expect our net income to get split 50/50 with my partner as K1s.