Reporting income from phone app.
I have a friend who has written a few iPhone apps on the side. He is about to release one he developed with the help of someone else. Apple only allows one name to be submitted and since he already had an account with them they submitted it under his name. Apple pulls taxes out before they send the money to the developer. What's the best way for him to pay his partner her 50%? My suggestion was to pay the partner the 50% of the pretax amount and 1099 the partner for the amount paid.