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I own a single member LLC. I file Sch. C - cash basis. I provide computer consulting servs. In July, a new partner, not part of my LLC, will deposit, into my LLC, $120,000 for rent for four years. From this $120K I will pay $30,000 rent to our landlord each year. I understand I will be able to take a deduction for the $30K rent that I pay. Can I avoid paying tax on the balance each year? $90K in 2012. $60K in 2013. $30K in 2014. I'm willing to form a new entity if necessary. Thanks -

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Judd Conway
Your question is not completely clear. You describe this new person as a partner, but it is not completely clear exactly what the relationship between this person's work and yours is. Also, are you saying that this person is paying a lump sum of $120,000 in 2012? If so, there is income received only this year ($120,000 in with $30,000 going out). If this is correct, there is no income received in connection with that transaction (except for any investment return on the money) in subsequent years and hence no additional tax due - but the first year (2012) could be a real bear. This assumes that the money this person puts in is not restricted in any significant way.
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