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Richard
Richard, Tax Attorney
Category: Tax
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Experience:  29 years of experience as a tax, real estate, and business attorney.
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I have a tax questions. My wife and our neighbor started a

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I have a tax questions. My wife and our neighbor started a joint business venture last year selling gift baskets online. We've both invested different amounts of money in to the business but have shared the profits equally. We have a business license that lists the two of them as general partners. Since our expenses are different based on our individual financial investment in the business, do we both just deduct whatever our individual expenses were on our own taxes this year and split the revenues or do we have to file our business taxes together somehow? Thanks!!
Submitted: 5 years ago.
Category: Tax
Expert:  Richard replied 5 years ago.

Good morning. Since you have a partnership, the partnership needs to prepare a tax return and then allocate the deductions to the two of you as partners via a K-1 to each of you. You then take the items on the K-1 and report it on your 1040.

 

 

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The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

 

Customer: replied 5 years ago.
So to clarify, we each need to file a K1 with our individual tax returns showing our own portion of profits and losses for the partnership?

Is there an actual form or return that our partnership needs to send to the IRS independent of our personal returns with the K-1 forms?
Expert:  Richard replied 5 years ago.
Yes, the partnership will file Form 1065. Then it issues K-1's to you allocating out to each of you your allocable share of the partnership items.
Richard and other Tax Specialists are ready to help you
Customer: replied 5 years ago.
Thanks!!!!

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