Robert,Sch C instructions clearly state you must each file a separate Sch C and each file a separate SE.
Also, this is from an email I received from David Mellem (many of you probably know Dave & Mary) on Dec 24, 2007:
The Small Business and Work Opportunity Tax Act of
2007 (Public Law 110-28) signed on May 25, 2007, created a Qualified Joint Venture. This is a trade or business operated solely by a husband and wife where both materially participate, and both ELECT to treat the income as outlined here.
A qualified joint venture is not to be treated as a partnership, all income is divided between the spouses in accordance with their interests in the venture, and each spouse reports his/her respective share as if it was a sole proprietorship including paying self-employment taxes on such profit.
The instructions for Schedule C includes a brief discussion of a qualified joint venture. These instructions may be enlightening for some. For example, they refer to two Schedule Cs, not one as some tax software programs have previously allowed.
The wording says:
"Husband-wife business. If you and your spouse jointly own and operate a business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. Do not use Schedule C or C-EZ. Instead, file Form 1065. See Pub. 541 for more details.
Exception – Qualified joint venture. If you and your spouse materially participate (see Material participation beginning on page C-2_ as the only members of a jointly owned and operated business, and you file a joint return for the tax year, you can make a joint election to be taxed as a qualified joint venture instead of a partnership. To make this election, you must divide all items of income, gain, loss, deduction, and credit between you and your spouse in accordance with your respective interests in the venture. Each of you must file a separate Schedule C or C-EZ. On each line of your separated Schedule C or C-EZ, you must enter your share of the applicable income, deduction, or loss.
As long as you remain qualified, your election cannot be revoked without IRS consent."
Donna J. Perrone, EAEast Haven, CT203-469-4939203-468-2038 faxIRS Circular 230 Disclosure: Unless expressly stated otherwise, any tax advice contained herein, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (1) avoiding tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax-related matters addressed herein.
From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Robert Lukey
Sent: Tuesday, October 28, 2008 5:33 PMAs of 01/01/07 H & W can file a joint Schedule C. As a matter of IRS judgement I filed 4 years of delinquent returns recently and noted J on the Schedule Cs. The IRS accepted the returns without any challenges.
On Tue, Oct 28, 2008 at 11:29 AM, Lynn Snyder <lynn7j3@yahoo.com> wrote:
That is also my understanding: a sole member can file a Sch C, but not a H & W.
Lynn Snyder, EA
Enrolled to Practice before the IRS
Tax & Financial Solutions, Inc.
IRS Circular 230 Disclosure:
Any advice relating to a Federal tax issue contained in this communication, including in any attachments, was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.
--- On Tue, 10/28/08, Mel Wolfson <mwolfso@optonline.net> wrote:
From: Mel Wolfson <mwolfso@optonline.net>
Subject: RE: [taxchat] Husband-Wife LLC & OIH
To: taxchat@yahoogroups.com
Date: Tuesday, October 28, 2008, 2:13 PM
I believe that an LLC can not elect to be treated as two Schedule Cs.
From: taxchat@yahoogroups .com [mailto:taxchat@ yahoogroups. com] On Behalf Of Arnold M. Socol
Sent: Tuesday, October 28, 2008 2:02 PM
To: taxchat@yahoogroups .com
Subject: Re: [taxchat] Husband-Wife LLC & OIHDonna,I was waiting for someone smarter than me to answer your question - but why not 2 Sch C's allocated between H & W instead of 1065?See Pub 587 for all your answers and more. www.irs.gov Search - Pub 587.Arnie----- Original Message -----From: Donna J. PerroneSent: 10/27/2008 6:01 PMSubject: [taxchat] Husband-Wife LLC & OIHHusband and wife run a business together out of their home. Because they are an LLC, they can't be a qualifed joint venture and file on Sch C. I will file a 1065 for 2008.I think I know the answer to my question, but I would appreciate someone confirming my thoughts. How should they take credit for office in home expenses for the business? Should we just calculate what the appropriate amounts should be, and have them write a check out of the business to reimburse themselves? And when would be the best time to do this? Quarterly? And what about for the 4th quarter? If the payment is made in January (they are cash basis), that would be taken on next year's return.Comments are appreciated.DonnaDonna J. Perrone, EAEast Haven, CT203-469-4939203-468-2038 faxIRS Circular 230 Disclosure: Unless expressly stated otherwise, any tax advice contained herein, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (1) avoiding tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax-related matters addressed herein.
--
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IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.
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28 Oktober 2008
Re: [taxchat] Husband-Wife LLC & OI
I am attending the Gear UP Individual Tax Seminar this December. It was at last years where I was told that the IRS now accepts a J on the Schedule C. This in effect causes all incomes and expenses to be split and does go on two Schedule SEs. I will be asking this year where I can look in the regs that this is still in fact viable. I can tell you I've been using the J.
On Tue, Oct 28, 2008 at 3:25 PM, Donna J. Perrone <donnaperrone@sbcglobal.net> wrote:
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