Discussion:Minors with direct selling business
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Discussion Forum Index --> Tax Questions --> Minors with direct selling business
| 27 June 2007 | |
| Hi. My wife recently told me about this situation, and asked me how their taxes might be filed. I'm stumped. Can anyone provide any direction.
A family has a mother and two children. In order to teach the minor children about "business", they set up a candle business though a home party sales company. The children operate the business and make all the decisions. However, because the children aren't of legal age to sign a contact, the mother signed the agreement with the direct selling company. At the end of the year, the mother will be issued a 1099 by the direct selling company. However, since it's the kid's "business", is there something akin to nominee interest or the like to assign the business income to the children? Would all three of them be considered a partnership, despite a contract prohibition by the direct selling company on conducting business as a partnership? Thanks for any guidence you can provide. | |
| 27 June 2007 | |
| Truth really is stranger than fiction. :)
When I was a kid and my parents wanted me to learn about business I opened a lemonade stand or cut the old neighbors lawn. Boy have times changed. | |
| 28 June 2007 | |
| Sounds like a partnership. File 1065 form spliting up income amoung the partners. Report 1099 amount on your return's schedule C and then back out as an expenses with notation " reported in Partnership Fed ID # xxxxxx". The fact there is a contract prohibition has no bearing on how to report amount to the IRS. | |
Bottom Line (talk|edits) said: | 28 June 2007 |
| Try doing an "in and out" on the sch C. Report all the income then 1099 the kids for all of it. Of course the kids need to file a return. | |
