karen[at]nospam.net wrote:

- quote -

Your boyfriend should have talked to a lawyer. If he's the
managing member he is control irrespective of how large his
interest in the LLC is. Depending on the laws in your
specific state, better might have been to use a limited
partnership instead.

- quote -

Someone who prepares returns will come along in a few
minutes and give you a better answer. It seems to me that
if he's giving you a K-1 it's for a proportionate share of
LLC income, which you should claim. Apparently he is
treating the 10% he gave you as a true gift, which means you
don't pay tax on that.

But if your share earned $1800, the question in my mind is
whether the value of that share would be considered more
than $11,000. If so, he should have filed a gift tax
return.

Stu

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My boyfriend made me a 10% member of his LLC so that he
could sell 45% to someone else and still retain control.
I do absolutely nothing for his business. He gave me a
K-1 for $1,800 for 2003. Do I have to pay self-employment
taxes on this money?

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