How does revenue shared with someone else go into my tax return in Canada?

Question

I'm contracting to publish a game for someone on Apple's App Store. I will take 15% of the revenue, he gets 85%.

But Apple will report the full amount to the government. Let's say for example this title is very popular (unlikely, but for the sake of argument) and earns a million dollars. I get $150,000, but Apple reports that I got a million.

Am I supposed to be in the much higher tax bracket now? Am I able to report the $850,000 as not my income since I just handed it over to the other guy, who would report it as income?

I'm aware I need to consult the tax code, but I'd like to know at least where to start with this. What kind of money is this?

Answer 1

Generally, report your $150,000. If/when the the tax collectors notice the anomaly, they'll attempt to contact you to remedy it. I can't speak for Canada, but in the US, it's pretty orderly. The IRS requests additional information or proof and only open it up into a full blown audit if the suspect wrongdoing. In your case, you could show a business agreement detailing the revenue split proving you correctly reported.

This is only for your consideration. I strongly recommending finding and keeping a professional tax advisor.