Discussion:Guaranteed payment to foreign partner

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Revision as of 04:51, 4 September 2008

Discussion Forum Index --> Advanced Tax Questions --> Guaranteed payment to foreign partner
Discussion Forum Index --> Tax Questions --> Guaranteed payment to foreign partner

Johnhuddleston (talk|edits) said:

4 September 2008
My client is a partnership with one US partner and one foreign partner. The foreign partner (programer) performs all work outside of the US. Both partners now want to subcontract more work to other unrelated foreign vendors. As it is currently structured, the foreign partner pays US tax on his k-1 share of profits. If he received a guaranteed payment instead, wouldn't there be no US tax since he is performing all his work outside of the US? Additionally, is there any restrictions prohibiting the partnership from subcontracting more work to unrelated foreign vendors?
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