Tax time for JV partner not on title

[MKBridge]

Hi:

My JV partner who put money toward a condo I owned has asked about documents for her taxes (asked for by her accountant). She has asked about the interest on the mortgage, rents, expenses, etc.

The condo is in my name only. She came on as a partner after purchasing and we have a signed JV agreement.

My thought is that she would be unable to add this investment to her income tax statement. Am I correct?

Thanks in advance, Kathi

 

[Thomas Beyer]

QUOTE (MKBridge @ Apr 27 2010, 06:28 AM) .. Am I correct?
an equity investor gets his/her share of losses/gains, annually, assuming you have a JV agreement stating that.

Is she a lender ? Then she needs to get a statement showing X% of interest paid or accrued !

Is she an equity investor ? Then she needs an anual JV accounting showing rental income and expenses .. as well as a balance sheet showing assets incl depreciation and/ or liabilities .. and her share thereof (assumign 50% .. but it may be different)

Once she has that her accountant can figure out her taxes, namely: any net rental income can be offset by depreciation (and it is usually negative after depreciation or CCA) .. and thus no taxes payable .. and any net rental loss excl. depreciation can be deducted against employment income !

You could issue a T5013 (Statement of Partnership income or losses .. this is what we do) .. but it is not legally required on a small scale JV !

 

[mcgowan]

Hi - If you have several properties with one JV investor would you prepare only 1 T5013? What if there is another JV partner on one of the properties? I assume you would need to separate that one and preapare 2 T5013`s for the first partner?

 

[Thomas Beyer]

QUOTE (mcgowan @ Apr 28 2010, 06:20 AM) Hi - If you have several properties with one JV investor would you prepare only 1 T5013? What if there is another JV partner on one of the properties? I assume you would need to separate that one and preapare 2 T5013`s for the first partner?
one per "entity"

so if investor A owns 50% with you on property A, B and C then you could co-mingle that accounting

if investor A also owns 25% of a property with you and investor B .. then a 2nd separate statement ..

does NOT have to be a T5013 .. could be a basic Simply or QuickBooks accounting printout