USA in-house affiliate payouts best practices - two LLCs

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Hello.

I have a scenario between two existing LLCs.
LLC A is a merchant with an in-house affiliate program
LLC B is a publisher site
Both are separate legal LLC entities.
If B signs up with A and posts ads on B site
Traffic goes to A and commissions are generated per terms
A payout report is generated by A to pay B based on terms

I own both of these entities but it seems silly to pay ourselves a commission
But from an accounting perspective it seems like the right thing to do to pay legal entity B and treat them as any other affiliate
and handle the inbound commission as income for B and as an expense from A accordingly.

Am I thinking about this correctly ?
 

kirby

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Yes.
For one thing, consider if in the future you were to sell B. B would show less current income and less equity than it should actually have. So you’d get a lower sales price for B.
 

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