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Posted by Tyler Franks on April 1, 2008, 4:30 pm
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Does the simple fact that two people (unmarried) own a rental property
together create a Partnership and thereby require a 1065 and an EIN? Or may
they just make a Schedule E calculation and "split it"?
Tyler Franks
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Posted by Mark Bole on April 1, 2008, 10:23 pm
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Tyler Franks wrote:
> Does the simple fact that two people (unmarried) own a rental property
> together create a Partnership and thereby require a 1065 and an EIN? Or may
> they just make a Schedule E calculation and "split it"?
Opinions differ, but reference archives of this group and IRS pubs, and
you will find that in your situation, if no services are provided to
renters, you can simply split Schedule E amounts on the separate returns.
-Mark Bole
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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
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<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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Posted by Stuart Bronstein on April 2, 2008, 12:42 am
Please log in for more thread options > Tyler Franks wrote:
>> Does the simple fact that two people (unmarried) own a rental
>> property together create a Partnership and thereby require a 1065
>> and an EIN? Or may they just make a Schedule E calculation and
>> "split it"?
>
> Opinions differ, but reference archives of this group and IRS
> pubs, and you will find that in your situation, if no services are
> provided to renters, you can simply split Schedule E amounts on
> the separate returns.
I have a recollection that the code allows some people to elect out of
partnership treatment if the calculation and division of profits and
losses is simple.
Stu
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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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Posted by Harlan Lunsford on April 2, 2008, 5:41 pm
Please log in for more thread options Stuart Bronstein wrote:
>> Tyler Franks wrote:
>
>>> Does the simple fact that two people (unmarried) own a rental
>>> property together create a Partnership and thereby require a 1065
>>> and an EIN? Or may they just make a Schedule E calculation and
>>> "split it"?
>> Opinions differ, but reference archives of this group and IRS
>> pubs, and you will find that in your situation, if no services are
>> provided to renters, you can simply split Schedule E amounts on
>> the separate returns.
>
> I have a recollection that the code allows some people to elect out of
> partnership treatment if the calculation and division of profits and
> losses is simple.
>
Not quite. If a partnership exists, a 1065 should be filed.
HOWever; what you're thinking of maybe is common ownership of property
does not a partnership create.
ChEAr$,
Harlan
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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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Posted by Stuart Bronstein on April 2, 2008, 6:01 pm
Please log in for more thread options > Stuart Bronstein wrote:
>>
>> I have a recollection that the code allows some people to elect
>> out of partnership treatment if the calculation and division of
>> profits and losses is simple.
>>
>
> Not quite. If a partnership exists, a 1065 should be filed.
>
> HOWever; what you're thinking of maybe is common ownership of
> property does not a partnership create.
Thanks. What I was thinking of was IRC §761(a), which says,
"(a) For purposes of this subtitle, the term “partnership” includes a
syndicate, group, pool, joint venture, or other unincorporated
organization through or by means of which any business, financial
operation, or venture is carried on, and which is not, within the
meaning of this title, a corporation or a trust or estate. Under
regulations the Secretary may, at the election of all the members of
an unincorporated organization, exclude such organization from the
application of all or part of this subchapter, if it is availed of—
"(1) for investment purposes only and not for the active conduct of a
business,
"(2) for the joint production, extraction, or use of property, but
not for the purpose of selling services or property produced or
extracted, or
"(3) by dealers in securities for a short period for the purpose of
underwriting, selling, or distributing a particular issue of
securities,
"if the income of the members of the organization may be adequately
determined without the computation of partnership taxable income. "
This is pretty academic since I haven't gone to look at the
regulations, and I don't know how it works in practice.
Stu
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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