Where to make election to be taxed as a Qualified Joing Venture.

[lydia33]

Both husand and wife equally run and share business income and expenses. Should that not qualify them for QJT? Everything is halfed right down the middle.

[mcb39]

Both husand and wife equally run and share business income and expenses. Should that not qualify them for QJT? Everything is halfed right down the middle.

I posted extensively and angrily on this over the weekend. It seems there is no way. We have to create a Schedule C for each of them now and do the splitting ourselves. It seems that too many people who were not in Community Property States were taking advantage. So, now, instead of one C and two SEs; we need 2 of each. Curses!!!!!!!!I have a bunch of these; just one more thing to make tax season such fun. :angry:

[kcjenkins]

Or you can go ahead and file a 1065, and then the K1s go into the personal return for each of them. There are some advantages, in some situations, to filing the 1065.

[joanmcq]

I posted extensively and angrily on this over the weekend. It seems there is no way. We have to create a Schedule C for each of them now and do the splitting ourselves. It seems that too many people who were not in Community Property States were taking advantage. So, now, instead of one C and two SEs; we need 2 of each. Curses!!!!!!!!I have a bunch of these; just one more thing to make tax season such fun.

And the reason it is gone is right there in mcb's post. she's in Tennesee and shouldn't have been using the damn thing in the 1st place. They should have been filing a partnership return all along.

[jainen]

>>We have to create a Schedule C for each of them now and do the splitting ourselves.<<

According to the IRS itself, in the instructions to Schedule C at http://www.irs.gov/pub/irs-pdf/i1040sc.pdf, that is the ONLY correct way to make the election for qualified joint venture. Some software may offer a checkbox, but there is nothing about a qualified joint venture that suggests the split should be 50/50.

[David1980]

There's no reason the software couldn't have a checkbox that automatically split the single Schedule C into a 50/50 split Schedule C for TP and SP. It would just be a bit more work than the old single Schedule C two Schedule SE method.

[lydia33]

And the reason it is gone is right there in mcb's post. she's in Tennesee and shouldn't have been using the damn thing in the 1st place. They should have been filing a partnership return all along.

Thanks for your comment but I could do without the PROFANITY!

[lydia33]

Or you can go ahead and file a 1065, and then the K1s go into the personal return for each of them. There are some advantages, in some situations, to filing the 1065.

Thanks KC. I had already decided to do that because they have a fed # with both of there names on it from years ago. Hey I posted yesterday about efiling some Ala. w/2. I efiled the fed but do no know what to do with the ala. First time to have some state w/2 to file.

[mcb39]

Or you can go ahead and file a 1065, and then the K1s go into the personal return for each of them. There are some advantages, in some situations, to filing the 1065.

But, KC, as I said last weekend, in most cases it is not cost effective or necessary to do a 1065 for most of these. Many of them are couples struggling to start a joint venture business due to the questionable economy and lack of jobs. They cannot afford a 1065 nor do I feel that it is in there best interest or mine to do all that unnecessary work. Believe me, I do know how and when to prepare a Partnership return and prepare several of them. That suggestion doesn't even enter into this discussion unless the joint venture doesn't qualify for the split C treatment. :angry:

[mcb39]

>>We have to create a Schedule C for each of them now and do the splitting ourselves.<<

According to the IRS itself, in the instructions to Schedule C at http://www.irs.gov/pub/irs-pdf/i1040sc.pdf, that is the ONLY correct way to make the election for qualified joint venture. Some software may offer a checkbox, but there is nothing about a qualified joint venture that suggests the split should be 50/50.

That is absolutely correct, Jainen. It is the ONLY way now and is spelled out very clearly in the Schedule C instructions. I conceded days ago to do it correctly. However, the angst resulting here is because all are being "punished" for the misdeeds of some. After all, the same amount of income and SE tax will be generated no matter how you split it unless you give one less than $400. We are talking about a joint return here. All of my small businesses ARE 50/50 and I don't have the time, nor does my conscience allow me to even suggest a 1065 for them. I know the difference between a Joint Venture and a Partnership and file plenty of each.

[kcjenkins]

Marilyn, I understand that you are angry about the extra work that really accomplishes nothing. But be angry at the IRS, not the messengers. Perhaps we can all send suggestions for next year, not now but in April, that ATX offer us a new worksheet form that we could input the 'joint venture' data in, and put in the percentages [yes, it is usually 50/50 but not always] and then the program would split it into the two C's as well as into the two SEs. I suspect that if enough of us request it, politely, at the time when they are starting work on the new year's program, it might be included.

[jainen]

>>be angry at the IRS<<

Well, don't you think it's unfair to fault the IRS for giving more detailed instructions? Lacerte has several entries available for qualified joint ventures; if ATX does not it may be that CCH is trying to keep some extra features for its high end product.

[kcjenkins]

Well, personally, I have no problem faulting the IRS for not giving the small family business an easier option than they do. But I do understand that they are dealing with 'the law', and so I guess the real blame should go to the dunderheads in Congress who write the law. And make it more complicated then it needs to be, in this case.

Still, it's not always that horrible to do an extra C. It's only a problem when, as is often the case, there are depreciable assets to consider. Splitting those is where the problem occurs. A lot of extra work that benefits no-one.

I can't say that I blame CCH for wanting to keep a few extra refinements for their high-end product. I was really impressed, tho, that they added the K-1 importing to our program, something that you used to have to pay the big bucks for. It's a wonderful addition, IMHO. A real time-saver when there are many partners. It cut my time significantly last week, when I did an LLC with 6 members, all of whom are my clients for their personal returns as well. Worked like a charm.