JV Accounting Question

[Nir]

Hi All,

When purchasing a Plex with a JV partner (classic deal 50/50 ownership, 50/50 net income), is it a good idea to have the same accountant
file taxes for both JV partners OR do you actually recommend each partner have a different accountant?

THANKS.

 

[Thomas Beyer]

QUOTE (investmart @ Feb 9 2010, 04:38 PM) Hi All,

When purchasing a Plex with a JV partner (classic deal 50/50 ownership, 50/50 net income), is it a good idea to have the same accountant
file taxes for both JV partners OR do you actually recommend each partner have a different accountant?

THANKS.
Your accountant should provide a statement of partnership/JV profit or loss to each party

then each party will use this statement to co-mingle with other employment or investment income

 

[Nir]

Thank You Thomas.

I like your first idea "Your accountant should provide a statement of partnership/JV profit or loss to each party".
However, why do you not also recommend the same accountant (my accountant) also does the rest/personal tax filing too for each of us?
Any disadvantage to letting him do everything or did you just not recommend it because you assumed my partner already has a different accountant?
(I`m asking because he doesn`t).

Regards,
Neil

 

[Nir]

Hi, just refreshing to see if anyone can/wants to answer my last questions above(?) Regards, Neil

 

[Pheenix]

Hi Neil
I`m neither an accountant or lawyer, so I would ask the accountant first; do they see, or does their respective professional body have a position on potential conflict of interest like this situation. It is not as clear situation as in legal advice.

Second, are both partners arms length to the accountant, this is a more critical question.

Using the same accountant will ensure that all implications arising from the partnership activities are treated consistently by the partners, which is important to CRA.

There are a number of reasons to separate them but this may be a good starting point, and most of them will arise as you get into more complex situations and you can deal with them then.

Hope that helps, Brad

 

[Thomas Beyer]

QUOTE (investmart @ Feb 10 2010, 10:49 PM) ..
However, why do you not also recommend the same accountant (my accountant) also does the rest/personal tax filing too for each of us?
an option ..

but usually the JV and other income (say employment income) are not related ..

All I am saying is that the JV has a dedicated accounting and thus, accountant .. and that person may or may not be the same you use personally or your JV partner .. and as you grow you will have more than one JV partner ..

 

[Nir]

Thank You Brad and Thomas for the input/clarification!
Neil