Expert: John Kirk, CPA Date: 7/17/2008 Subject: How to report to investors in an LLC
Question Hi,
I have a single-member LLC. If investors put money into it with the idea of earning interest income through a venture, how do I report the interest and related expenses to them? They would not be members, so I would not use a K-1. Should I use a 1099-INT and show net profit? If not, then what?
Thanks,
Gary
Answer It depends on how they are investing in the LLC, if not as members than they are loaning the LLC money payable in interest which is not dependant on earnings. They should be given a 1099=int based on the interest paid to them, evidenced by a promissory note.
