USA 1099 and K1 income for LLC members

[Frudah]

I am part of a 4 member LLC. The other member have alienated me and are playing games with how they classify distributions and file the taxes.
They’ve paid themselves each about $150,000 in distributions in the past two years and have only paid me about $6500.

Their new method is by saying that they are paying themselves ‘hourly’. However they claim all this money on their K1’s. My capital account has continually increased and is about $140.000 as of end of 2023. Their capital accounts are either zero’d out or negative. They also claim that they are paying themselves as 1099 contractors, but again, they file all this on their K1’s. They also claim that they are filing 1099’s. Can you file The same income on both these forms? Can a member of an LLC pay themselves as a 1099 contractor?

thanks

 

[BIG E]

You haven't stated whether you are a limited partner as opposed to being a general partner.
Is the $ 150,000 they are each taking considered a Guaranteed Payment or a direct reduction of their equity accounts?
'Paying themselves as 1099 contractors - filing this on their K-1s" doesn't make sense. They are probably recording these
expenses as business expenses, and the 1099 amounts are recorded by them as self-employment income on their own
tax returns. 1099 income doesn't show up on K-1s. It's possible that it's recorded as guaranteed payments.
You have apparently confused a number of issues, and perhaps have misstated material facts.

 

[espresso_941]

I am part of a 4 member LLC. The other member have alienated me and are playing games with how they classify distributions and file the taxes.
They’ve paid themselves each about $150,000 in distributions in the past two years ..../... they claim all this money on their K1’s.

What does the partnership / LLc operating agreement say?
Sounds like if your feeling ripped off you need an attorney.

My capital account has continually increased and is about $140.000 as of end of 2023. Their capital accounts are either zero’d out or negative.

A negative account meaning they owe the business money?

They also claim that they are paying themselves as 1099 contractors, but again, they file all this on their K1’s. They also claim that they are filing 1099’s. Can you file The same income on both these forms?

No you can never claim the same money on both forms, in theory they could be doing some payouts as 1099 non-employee compensation combined with a K-1, you need to clarify your relationship with this business.
Good luck

 

[vantageboxes]

LLC members receive income reported on a Schedule K-1 for their share of profits, losses, and credits. Additionally, they may receive income reported on a Form 1099 for services rendered to the LLC as independent contractors. Both forms are essential for tax reporting purposes.