A sole proprietor is running a partnership business with his brother. The input of the firm is the output of the sole proprietor business. The firm never pays the sole proprietor because both the business is run by the same person and same family.
Now, the debtors of sole proprietor is very high and the creditors of firm is very high because of this reason. (Both of them fall under tax audit)
1. How to solve this issue?
2. Can the sole proprietor bring in goods as his capital contribution to the firm every year? Is it allowed? What are the tax implications?
3. Can I write off the payables and receivable amount? What will be the tax implications?
4. What is the solution for this problem?
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