USA Three Member LLC, one is an investor...

[steveknarf]

Situation:
- Three partners; two that operate the business, one is remote investor. Manager managed LLC, each at 33.3% ownership.
- The two operators will be compensated by salary/guaranteed payments
- Remote partner/investor will receive priority payments on initial investment until made whole.
- At that point, profits will be shared according to the 33.3%

We thought this was cool, until the investor realized they need to pay taxes on re-payments. :\

1) We messed up?
2) How do we fix this?... what is the correct business structure to best accommodate?
3) Or the best agreement within the current structure to suffice?

Help.

 

[DrStrangeLove]

How is the LLC currently being taxed, as a partnership, an S corp or as a C corp?

Is the LLC managing rental property?

 

[steveknarf]

partnership, and no