A Reader Wants to Know How Payments Are Allocated
We respond to a reader's question on how payments get allocated for various entities
A reader sent in a structure that looks, at first glance, like it should generate $400,000 of payments, but it won’t.
Here’s the setup:
Wife is the landlord on a 30% crop share and qualifies for $50,000 of payments in her own right.
Wife is also an 85% limited member of an LLC. Husband is the 15% manager-member. The LLC qualifies for $150,000.
Husband owns 100% of a C-corporation operating entity, which qualifies for $200,000.
So, the three operations together qualify for $400,000. The question is how much the family actually collects once the rules run their course.
How the dollars get allocated
Payments are attributed to the individuals behind each operation, by ownership share. So:
