[Trusty]

A couple walked in and would like to file their small business income as Partnership. Yet they didn't register as Partnership in year 2006.

Is it necessary to register a Partnership to report self-employed income as partnership income or they could just report their business name as "Mr.A and Ms.B"?

Help is appreciated !

[Trusty]

snowplowguy, on Feb 13 2007, 02:35 PM, said:

Partnership must be registered with the Ministry of Consumer & Business Services if they wish to operate using a name other than their own names. It's a good idea to have the partnership registered with the Ministry in any event.

Partnership must be registered for federal business accounts (GST, ETD) as required by legislation (ie sales over 30k or employees subject to deductions etc).

Thank you for the post,snowplowguy :rolleyes:

Let me explain their situations more ...Their situations are like this. They purchased several real properties under both names and did minor renovation and then sold them to make profit. They didn't register any partnership as they didn't operate the business other than their own names. I was wondering if it is ok to report the profit as partnership income as they didn't register as partnership in year 2006.

More comments are appreciated!

[JD Blazek]

Trusty, on Feb 13 2007, 09:50 AM, said:

Thank you for the post,snowplowguy :rolleyes:

Let me explain their situations more ...Their situations are like this. They purchased several real properties under both names and did minor renovation and then sold them to make profit. They didn't register any partnership as they didn't operate the business other than their own names. I was wondering if it is ok to report the profit as partnership income as they didn't register as partnership in year 2006.

More comments are appreciated!

Sounds like standard Co-Ownership between spouses. Put it on a business schedule (I assume you are not attempting to claim as capital gains) and put the split in there.

[Trusty]

JD Blazek, on Feb 13 2007, 06:43 PM, said:

Sounds like standard Co-Ownership between spouses. Put it on a business schedule (I assume you are not attempting to claim as capital gains) and put the split in there.

Thank you, JD. :rolleyes:

[dunner]

If you file this on a partnership statement and they have been buying and selling real property, they're risking having their gains treated as business income. Wouldn't they prefer to have it taxed as a capital gain?

[RL Tax Joe]

dunner, on Mar 6 2007, 08:03 AM, said:

If you file this on a partnership statement and they have been buying and selling real property, they're risking having their gains treated as business income. Wouldn't they prefer to have it taxed as a capital gain?

They are in the business of buying repairing and flipping homes....If not a business, it is definitely an AINT.

[unknown]

snowplowguy, on Feb 13 2007, 07:35 AM, said:

Partnership must be registered with the Ministry of Consumer & Business Services if they wish to operate using a name other than their own names. It's a good idea to have the partnership registered with the Ministry in any event.

if you are in Ontario, that is. In Alberta you go to your favorite registries office.

[JohnV]

Trusty from the facts provided, it's definitely business income...trying to file the dispositions as capital gains is going to raise a big honking red flag because, as you point out, they've done it several times this year.