A lot of people are getting into partnership these days to do fix and flip or other real estate projects. Typically, one will provide the funds and the other will provide the time. I like this type of arrangement, since it maximizes the resources of both parties. The key here, is that there is a partnership, regardless of what else you may want to call it. You may call it a loan or you may call it a joint venture. From a tax standpoint, it's still a partnership and should be treated that way. Here is a specific question from one of our School of Tax Strategy members, Bojan.

Q: have a partner that is buying property, it will be on his name and he will pay for it. Together we will do rehab and split cost of rehab, profit from sale of property we will share. How he should pay me my portion of profit and is he will be responsible for taxes from full profit and can we split that expence and how. Thank you

A: You have a partnership. And probably a general partnership at that. You should create a set of accounting records for the partnership, do a tax return for the partnership and set up an entity for the partnership. Garrett Sutton and I teach a course on this for Rich Dad Education. You may want to sign up for it. Garrett is an attorney and teaches the asset protection part of the course while I teach the tax side.

Warmest regards,

Tom