nateham6
2007-12-02 14:55
I have set up a professional birddog company(S-Corp), where we refer real estate leads to investor sand get paid a fee for the lead given the investor closes on the deal.
How would this business income be taxed?
I have set up a professional birddog company(S-Corp), where we refer real estate leads to investor sand get paid a fee for the lead given the investor closes on the deal.
How would this business income be taxed?
what income? (LOL, enter creative accounting)
I look at it as being a consultant.
When I was paid to find office space for a company, I gave them an invoice, and they cut me a check, which I booked into quick books as consulting services provided or something like that.
I hope that answers your question.
My tax accountant told me this:
The IRS requires you to report all income.
If you grow pot, you're a farmer
if you're a drug dealer, your in distribution.
Obviously my person was very liberal and was a flower child. Check w/ your CPA for tax advise.
It's ordinary business income. Since you are an S Corp, you wouldn't pay SE tax on your distributions, although you would pay the 15.3 percent on your "reasonable" salary (you can write off the employer contribution amount of 7.65 percent). [addsig]
By the way, you file an 1120 S tax form (informational return), but the profit/loss flows through to your 1040. With very few exceptions, the S Corp itself would pay no tax. Corporations are also exempt from the 1099 requirement when receiving $600 or more in a year (except for attorneys--even if they have a Professional Corporation--if you pay your attorney $600 or more in a year, you must give your attorney a 1099). Not even the IRS trusts attorneys. [addsig]