I am always amazed at the amount of the bad information circulated online.
While preparing for our class on REI Partnerships, I googled “Joint Ventures.” Saying that the information is bad would be an understatement.
One blog states: “The Internal Revenue Service does not require joint ventures to file a return as a separate entity. All revenues and expenses are included on the member’s return to the extent of its interest in the joint venture.”
Another one chimes in with similar baloney: “A joint venture does not file taxes with the Internal Revenue Service as a business entity.”
There is one conclusion from reading these posts: stay away from legal and tax advice administered online by liberal arts majors without any professional credentials. Of course, professional credentials are no guarantee of competence, but at least you are less likely to be misled with garbage information. Yes, I am ticked off.
So here is the real answer. Per Federal Regulations, the term “partnership” includes a limited partnership, syndicate, group, pool, joint venture, or other unincorporated organization, through or by which any business, financial operation, or venture is carried on. Accordingly, joint ventures do need to file a Federal partnership tax return for any year the JV was conducting business. It is not a grey area, it is pretty straightforward.
Joint ventures do need to file a Federal partnership tax return for any year the JV was conducting business
Wonder what other myths were told to you? Do not miss our November 12 by myself and real estate attorney Steven Newsom. We will be teaching a 4-hour advanced seminar “Mastering REI Partnering” which is open to public.
2017 update: recording coming June 2017