Wife wants to start business with partner?
My wife and I already have a sole proprietor business license together and now she wants to start a business with one of her friend. If their business venture makes profit, they will split in half. My wife and her partner will use our business license to purchase and sell products. So my question is that when it is time to file tax, can my wife report income as what she gets from the business (half) or she has to report in full? Or it is better for them to form a partnership of some sort?
Get with your CPA or the attorney that helped you create your first business. Your wife’s friend is kewl, I am sure but money and business makes people crazy. From your wife’s point of view she’s gonna want at least 60% "controlling" intrest. Maybe even an even split between the two with you holding 10% just to be able to stop anyone from doing something stupid. my wife and a friend started a placement agency that leased offices from my business, my wife and her partner had the largest interest, I had 5% and we had our CPA take 5% that kept any hanky panky from injuring our other interests. Your current business can do the wholesale purchasing, but your still gonna be responsible for the sales taxes, or your proof of wholesale re-sale (to your second business) had better be lock tight. The checks need to trade bank accounts. You dont want to get the state comptroller on your but. You can punk out an IRS agent, that’s easy. The comptroller however will mess you up bad.
Your also gonna want to create a solid wall seperating the two businesses. Just in the event the friend freaks out and try’s to take a percentage of it in court. Or if you and your wife should someday divorce.
Your CPA should be able to discuss all the concepts of what you need to do, and he shouldnt charge you much more than a monthly bookkeeping audit. The attorney is gonna be your best source for exactly what to do, and usually he will cover most of that in the incorporation meeting, but you have to ask him so have a list of questions ready.
protect yourself
protect your busines
October 18th, 2009 at 2:57 am
Seek professional advice from your CPA or you may find yourself on the wrong side of the table with an IRS agent.
References :
October 18th, 2009 at 3:41 am
Get with your CPA or the attorney that helped you create your first business. Your wife’s friend is kewl, I am sure but money and business makes people crazy. From your wife’s point of view she’s gonna want at least 60% "controlling" intrest. Maybe even an even split between the two with you holding 10% just to be able to stop anyone from doing something stupid. my wife and a friend started a placement agency that leased offices from my business, my wife and her partner had the largest interest, I had 5% and we had our CPA take 5% that kept any hanky panky from injuring our other interests. Your current business can do the wholesale purchasing, but your still gonna be responsible for the sales taxes, or your proof of wholesale re-sale (to your second business) had better be lock tight. The checks need to trade bank accounts. You dont want to get the state comptroller on your but. You can punk out an IRS agent, that’s easy. The comptroller however will mess you up bad.
Your also gonna want to create a solid wall seperating the two businesses. Just in the event the friend freaks out and try’s to take a percentage of it in court. Or if you and your wife should someday divorce.
Your CPA should be able to discuss all the concepts of what you need to do, and he shouldnt charge you much more than a monthly bookkeeping audit. The attorney is gonna be your best source for exactly what to do, and usually he will cover most of that in the incorporation meeting, but you have to ask him so have a list of questions ready.
protect yourself
protect your busines
References :