Taxpayer is a 50% owner of a LLC's. His wife wants to work there to help her husband. Does she have to be get paid? If she just works there to help her husband without getting paid, would it be a problem? Thank you.
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Last edited by Questionguy101; 06-16-2009, 02:12 PM. -
For openers,
is she by any chance the other owner or is someone else the other owner and if so are they a relative? Is this in a community property State?
My personal take would be that she can't work in the business without getting paid but I don't have a cite for that. -
Thank you for your reply.Originally posted by erchess View Post
She is not a owner. But her husband is a 50% owner of the LLC.
Yes, they are in a community property state.Last edited by Questionguy101; 06-16-2009, 02:47 PM.Comment
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Elaboration
That she is in a community property state means as I understand it that for tax purposes she is 50% owner of all that he owns and he is 50% owner of all that he owns. I realize that this does not give her voice or vote in the affairs of the LLC but it does mean that half of her husband's income from it is hers. Therefore it would be a benefit to her to work unpaid for the LLC presumably increasing the amounts available to pay salaries and dividends to the owners. The Law won't stand for that.
Where are the more knowledgeable people than me who come to this board? Am I right or wrong and either way can one of you provide a cite?
Questionguy I hate to fudge on you but I am not sure I am right and I want to be careful not to lead you astray. My main purpose in answering was to move you back to the top of the list. I'm interested in this question and besides I have learned a lot from the answers to questions you have posted.Comment
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