See More: Monthly Tax Tips

Monthly Tax Tips

IRS Leaves Partnership Decision Up To Owners

Gelman, Rosenberg & Freedman CPAs is a member of CPAmerica International, an association of CPA and consulting firms that provides industry knowledge including insightful articles, to help member firms serve clients and other individuals and organizations.

Apr 3, 2014

The IRS recently advised a husband and wife, who together owned an unincorporated business, that their business would be treated as a partnership unless the couple elected for it to be disregarded (Private Letter Ruling 201411035).

The tax law defines a partnership to include any multi-owner unincorporated organization through or by means of which a business, financial operation or venture is carried on. Regulations allow certain unincorporated organizations to elect out of partnership treatment.

In either case, each spouse is responsible for paying any required self-employment tax on his or her net earnings from self-employment.

Jackie’s leadership allowed me to stay focused when faced with an audit a month after returning from extended leave. She stays in contact with me throughout the year and responds immediately to any questions … I am always impressed by the quick turnaround time. Our audit always goes smoothly.

Feng Zhang |  Finance Manager
The Arc of the United States