Discussion:Distribution of Income - broker commissions on a 1099
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Discussion Forum Index --> Advanced Tax Questions --> Distribution of Income - broker commissions on a 1099
Discussion Forum Index --> Tax Questions --> Distribution of Income - broker commissions on a 1099
| 5 November 2009 | |
| I ave a client that is a finacial advisor. He needs to setup a LLC to shelter risk and allow for other members. Under FINRA rules, his commissions must be paid to him individually and reported by his broker/dealer as a 1099. In the past he has picked up the enire amount under a Schedule C. How can he shift the income to his LLC where the firm expenses will reside? Are there any strategies to consider? | |
| 7 November 2009 | |
| Have the client pay 100% of the commissions received in his SSN to the LLC. I usually report the gross commissions and back them out on line 21 of the return. The statement attached to the return shows the 1099 income, the next line reads "Less amounts received as nominee for ABC, LLC (EIN: XX-XXXXXXX). That way, the IRS can trace the flow of the money. I know this isn't the technically correct way the IRS wants it reported, but I've never had an issue doing that with any of my financial advisors. | |
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