John R. asked
How does the IRS value sweat equity in a partnership? We started a business and some partners contributed money, while I contributed my time to do the construction of the place. The material was purchased with the money contributed by the other partners, and I contributed in doing the construction work. I estimate my time was worth about $20,000. Do you put $20,000 as the value of my contribution to the partnership and $20,000 as part of the construction cost of the business?
June 21st, 2023
Adam R. answered
Sweat equity, which is the increase in a business’s value due to your work, is recognized in a partn...
June 21st, 2023
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