Discussion:LLC Question
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Revision as of 13:14, 18 March 2008
Discussion Forum Index --> Accounting Questions --> LLC Question
Gwilson9564 (talk|edits) said: | 18 March 2008 |
| I am a member in a 4 member LLC, the LLC is taxed as a Partnership. We make our money on sales and have agreed to pay each member 50% commission for each sale. At the end of the year the profit of the company is split 30%,30%,25%,15% into the equity accounts of each member. How should the sales commissions be listed. I think as an expense, and each member will be given a 1099-MISC for the commissions paid (Sch c for taxes) and K1 for the profit place in the member's equity account.
I have read other posts that say the commission should be recorded as a member draw, which doesn't make since to me. Why would you pay someone with money that their already entitled to. The sales commission is paid to show the effort each member is putting into the company. example - If a member chooses not to sell anything, then they make no commissions and get only their split of the profits at years end, however if another member hustles and sells $100,000 they should be awarded extra for their hard work. I hope this makes since to everyone. Thank you, Greg | |
| 18 March 2008 | |
| Hi,
You are giving commission to your members of LLC on sales to be considered as a business expenses under the head sales commission and issue a form 1099-Misc. to all members to whome you paid commission. Thanks | |
| 18 March 2008 | |
| Greg,
You are obviously not a tax or accounting professional. This site is for tax and accounting professionals. Please seek professional tax advice before proceeding any further. The other posts don't make sense to you because you are not a tax or accounting professional and have zero expertise in this area. You obviously need someone to guide you because you don't have a clue as to what you are doing. Puru, please fill out a profile. Tom | |
| 18 March 2008 | |
| I agree with Tom and one further caveat, you don't issue members of an LLC a 1099 Misc. Get thee to a tax pro ! | |
