LLC Compensation

The video tutorial explains how LLC members share profits and losses, highlighting the default rule of equal sharing unless specified otherwise in the operating agreement. It also covers manager-managed LLCs, where members may receive salaries as guaranteed payments, treated as expenses. The tutorial discusses passive income for non-active members, which may not be subject to self-employment taxes, though this is debated.

What are the conditions under which special allocations of profits or losses can be made in an LLC?

What distinguishes passive income from self-employment income for LLC members?