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Level 5
July 20, 2020

Husband and wife Partnership filing as sole proprietors

  • July 20, 2020
  • 1 reply
  • 13 views

I understand that a husband and wife who have a Partnership can file as sole proprietors if they are in a community property state and file 2 schedule  C's .

My question is do they need to write a letter to the IRS to inform them of their intention or can they just file their first tax return on a 1040?

 

Thanks, Ky

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    1 reply

    Level 15
    July 20, 2020

    To file as a "Qualified Joint Venture" (not sole proprietors) on two Schedule Cs they can just file the Schedule Cs.  There is no need to notify the IRS.

    https://www.irs.gov/businesses/small-businesses-self-employed/election-for-married-couples-unincorporated-businesses

     

    As a side note, a Qualified Joint Venture can be done in any State.  The restriction is that if they are the only two members of an LLC, then that can only be done in a Community Property State.

    abctax55
    Level 15
    July 20, 2020

    Does everyone agree with Bill <w> ?

    (I do... 🙂

    HumanKind... Be Both
    sjrcpa
    Level 15
    July 20, 2020

    I do, too.

    The more I know the more I don’t know.