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I invest money to my friend for flipping home he gives my share of profit where do i teport this investment income?

Forum|Forum|6 years ago
March 31, 2020
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For examle i gave him money to buy home he does all the work for flipping home and gives me my share of profit on 1099 misc my question is that this is investment income how do i report it?

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Best answer by ThomasM125

Since you are getting a share of profits, this would be considered a partnership, so you should be filing form 1065, the partnership tax return. Once that return is complete, a schedule K-1 would be generated showing your share of profits. You would enter that information in TurboTax and it would show up as taxable income on schedule E, page two. It will be considered passive income if you indicate on the K-1 schedule that you don't materially participate in the business.

If you didn't file the partnership return, the only other place you could enter it in TurboTax would be as "Miscellaneous Income" as shown here:

That might not result in the proper treatment on your tax return, however, since it will be not be treated a passive income.

M

MinhT1

Buying homes to flip is a business activity which has to reported on Schedule C.

You have to report your 1099-MISC as self-employed income.

Please follow the instructions in this TurboTax Help topic to enter your form 1099-MISC on your tax return.

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S

shahanahouse654Author

Thanks

schedule c is for self employment or for bussiness

im a real estate passive investor

i do no work for flipping only invest money

T

ThomasM125Answer

Since you are getting a share of profits, this would be considered a partnership, so you should be filing form 1065, the partnership tax return. Once that return is complete, a schedule K-1 would be generated showing your share of profits. You would enter that information in TurboTax and it would show up as taxable income on schedule E, page two. It will be considered passive income if you indicate on the K-1 schedule that you don't materially participate in the business.

If you didn't file the partnership return, the only other place you could enter it in TurboTax would be as "Miscellaneous Income" as shown here:

That might not result in the proper treatment on your tax return, however, since it will be not be treated a passive income.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"