Partnership Created?

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

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

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

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