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Know the tax implications of teaming up with spouse

Real Estate Tax Talk

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There are lots of real estate agents who team up with their spouses. This can be a great way to run a real estate business, but there are some important tax consequences of running a business with your spouse.If you do nothing, you're in a partnershipFirst, you should understand that doing nothing about your business's tax status is not a good option. If you and your spouse run a business together as individual co-owners, you'll automatically be in a partnership for tax purposes. This is not so good because partnerships are required to file partnership tax returns (unless they elect to be taxed as a corporation, and file corporate returns instead). Partnership taxation is generally considered to be the most complex area in all of tax law. Partnership tax filings are not easy. Here is what you're supposed to do: complete and file Form 1065, Return of Partnership Income reporting all the partnership's income, deductions, gains, and losses complete a Schedule K-1 for each partner-spous...