Can you help me resolve this dispute with a friend?

Question

A friend of mine and I started a business and we needed $30K for the start up costs. Since I have more money, I agreed to put in $20K and he put in $10K. The start up costs only came to $20K so we agreed to refund the $10K excess back to ourselves. My calculations show that I should get back $6,667 and him $3,333 but he is very angry and disagreeable, claiming my bigger refund is not fair. He wants to split it 50/50. Who is right?

"any idiot can see that you are correct. "

I agree. So then I wonder why the left thinks tax cuts should not be applied using the same logic.

Answer 1

Very good point.

I bet this will just fly over the libs heads..

Answer 2

Ok so if you to wanted 50/50 partnership, but the actually start up came to 2/3 yours. Shouldn't you get the full refund of 10k. I mean you placed 20k instead of 10k. Now the fees meant your extra wasnt' needed. If you two truly want a 50/50 partnership you need your whole 10k back. If not your entitled to 2/3 of the returned and all the profits 2/3. If not your taking a loss and he's profiting.

Answer 3

Since you did not go in 50/50 you should not be refunded 50/50. Common sense seems to be as hard to come by as money for your friend... any idiot can see that you are correct... Actually if you wanted it to be a 50/50 partnership, you could have the entire 10k and you would have both invested the same amount.

Answer 4

It should be correct that you receive the larger amount back. Though if you do not have a specific partnership agreement, a court would probably say you shot yourself in the foot for not having one and the split is 50/50 because the partnership is distributed that way by default.

This is why I only work such things through a business entity like an LLC. It creates a party that you work through and this sort of issue is much easier to resolve.

Based on your friend's reaction though, I would seek to dissolve the partnership as soon as possible by either buying him out or by closing everything down.

"How you do anything is how you do everything." Based on that credo, he's going to do something like this again.

Answer 5

I have a good story about it if you are interested in reading it, BTW your math is correct, you get 2/3s

THE SIMPLIFIED EXPLANATION OF THE TAX STRUCTURE

Bar Stool Economics
Suppose that every day, ten men go out for a couple of beers and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes according to our current tax structure, it
would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until on day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily bar bill by $20."Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same percentage of total of what he had been paying, and he proceeded to work out the amounts each should pay.

And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 in stead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two"

"The rich get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him.

But when it came time to pay the bill, they discovered something important. They didn't have enough money among them all for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier, or not reinvest in the community.

For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.


David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia

Answer 6

You should take the whole refund, thus leaving everything fair both having put in $10k. Therefor all business is 50/50 after

Answer 7

Your initial investment was 33/66. Therefore, the split on the refund should be 33/66.

If you would have both put in $15K, then the split should be 50/50. But that's not the case.

Answer 8

Because the tax system is not a common sense system as much as it is a redistribution of wealth system, if your partnership is run like our government, you are wrong.

In fact you should get 40% and your partner should get 65%. The additional 5% will be recovered when each of you have to replenish your 'government's' coffers again next year.

Answer 9

The Lord said unto me, neither one makes any sense. You should get back $10,000.00. That way you have each got an equal amount invested. If you incurred any charges getting the initial funds, the company should pay both of you back as reimburement.

Answer 10

Jersey woman is suited, if he's truly that disenchanted to the ingredient the place he might end a friendship over it, then he wasn't a super buddy to start. tell him that he's overreacting, and he ought to understand your selection. If he remains mad, supply him some area and a few days to relax off. he would be nice (if he's a superb buddy) and if no longer, then what hve you somewhat lost.

Answer 11

Your math fits your knuckle dragging. I'm not sure your an air breather tho.

Assumptions of you are correct.

You really don't have any friends.
Libertarian who.

Wy did you not state the terms of your original partnership agreement. Was it to be 50/50 or did you have 66% from the beginning.
As always the truth is in the details.

I guess you just forgot those details in your rush to screw your "friend."

AND NOW YOU WANT A TAX DISCUSSION, GREAT PLOY TO THE KIDDiES. MAY YOU SIT ON CENTRAL AND VAN BUREN AND MELT IN YOUR SHORTS.

Play games with apple's and orange's just to show how benign your brain is.