Husband/Wife Joint Venture? - Revisited

Prior discussion of this issue here:

IRS guidance here:

7376,00.html The "Small Business and Work Opportunity Tax Act of 2007" allows husband and wife small business owners to elect to treat their business as a joint venture rather than as a partnership. I'm helping husband and wife joint filers, who, like many married couples, own and operate their farm together, but, to avoid the expense and complexity of a partnership, have historically reported farm income, expenses, and profit on Schedule F and Schedule SE in the husband's name and social security number.

The new law was apparently intended to provide the secondary spouse a share of the farm's income and social security credits without the need for a Form 1065 and K-1s - a good idea to resolve a long standing problem. However, the tax prep software I use does not provide an automated method to split depreciation expense between husband and wife. Creating a new Schedule F for the wife requires the creation of a new, pro-rated depreciation worksheet for each farm asset (in this case, over 75 items), and editing of the husband's 75+ depreciation worksheets to reflect his interest in the business. Overriding Schedule F depreciation expense with a manual computation of a percentage of the business's total depreciation is not an acceptable option as it prohibits e-filing of the return. Apparently, IRS (and tax prep software developers) gave little thought to the additional burden placed on, and the potential confusion caused to joint venture taxpayers to create and maintain two pro-rated depreciation schedules for one business. (Not to mention, later, remembering to make double entries for asset disposal.) This is a time consuming process, with significant potential for error, that many small business owners won't understand well enough to do on their own, and an extra expense they won't pay to have done by others.

It seems the desired result could have easily been obtained (as Harlan suggested) by having the joint venture husband and wife business owners maintain one set of books and one depreciation schedule for the business, file one joint Schedule C or Schedule F, and then prepare simple election statements (Schedule SE?) to apportion profit or loss to reflect each spouse's participation in the business. This would simplify record keeping and tax return preparation, make the qualified joint venture filing process more accurate, easily understood, and likely to be used, and promote overall tax compliance.

I've communicated my concerns to my tax prep software provider and to IRS. Meanwhile, any suggestions from anyone with a user-friendly way to accomplish joint venture filing?