Partnerships and Taxes

[Groundpounder]

Preface this to say, I have an appointment with a aviation lawyer next week to discuss this and other ownership/partnership issues, but figured I'd see what the PoA peanut gallery had to say.

I was told that we could be taxed on any money that we are putting aside for reserve if the airplane is registered to an LLC or a Corporation. Any truth to this? Any way to avoid this situation?

 

[Morgan3820]

If it going into the partnership account then, I would say yes it is taxable. As it is income for the LLC. Imo but I am not a lawyer or accountant. But I just set up an an LLC to own the aircraft and rent it out. If I set aside part of that rental income in a maintenance budget it would still be taxable income for the LLC, correct? But then when I used that money to maintain aircraft it would be a deductible item, correct?

 

[Groundpounder]

If it going into the partnership account then, I would say yes it is taxable. As it is income for the LLC. Imo but I am not a lawyer or accountant. But I just set up an an LLC to own the aircraft and rent it out. If I set aside part of that rental income in a maintenance budget it would still be taxable income for the LLC, correct? But then when I used that money to maintain aircraft it would be a deductible item, correct?

It would be a deduction, but would it counteract the taxes we have to pay on "income"? I guess that is why we need to talk to a lawyer

 

[wayne]

Talk with small business accountant. They'll know.