partnership woes

Discussion in 'Growing and Managing a Business' started by charmglow, Jun 11, 2010.

  1. charmglow

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    Jun 11, 2010
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    I am entered into a partnership with another gentlemen selling combustion equipment used in the aluminium and steel industry, with my interest at 49% and his at 51% as he is knowledgeable in this industry as reason for his majority interest. The main office and stock storeroom and my home holds all records for 10 years, is located at my home and is the legal address of the company and all transactions are done here. I run the company 100%. I receive rent from partnership to do so. And, I receive mileage as I do the running that is required picking up parts, etc... the other partner has another full time job and contributes to the partnership company only if i need a question answered or if i need some advice which would require a telephone call, which isnt very often. just recently this gentlemen has since requested to reimburse him the following on monthly basis:

    1. receive same monthly rent as myself for office (he has no office overhead)
    2. receive same monthly mileage as myself
    3. receive partial of his monthly phone
    4. receive his monthly internet
    5. he is now working on getting a new customer and wants to put in a timesheet for time he is spending negotiating and wants to receive a 1099 for this time (im guessing he will determine how much his time is worth) i thought partners dont receive 1099's?

    from what i understand, not 100 percent of entertainment expenses are able to be written off on taxes. This partner has history of reimbursing himself loads of entertainment expenses. I put in no expenses for reimbursement for entertainment. if this is true i have been assuming the tax burden of these parts that are not able to be written off?

    Please advise what my approach should be to this partner.

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