The IRS defines a Qualified Joint Venture as “a joint venture that conducts a trade or business where (1) the only members of the joint venture are a married couple who file a joint return, (2) both spouses materially participate in the trade or business, and (3) both spouses elect not to be treated as a partnership. A qualified joint venture, for purposes of this provision, includes only businesses that are owned and operated by spouses as co-owners, and not in the name of a state law entity (including a limited partnership or limited liability company).”
A Qualified Joint Venture allows spouses to avoid filing a Form 1065 (Partnership Return).
When a married couple indicates a Qualified Joint Venture election, all income, gain, loss, deduction, and credit will be split 50/50 between both spouses and reported on separate Schedule C Forms. If the participation between spouses is not a 50/50 split, it is recommended that both spouses file their own individual Schedule C’s.
Additionally, when making the Qualified Joint Venture election, neither spouse can claim the Business Use of Home Deduction. To claim this deduction, both spouses will need to file separate Schedule C Forms.
You may read more about the Qualified Joint Venture election, here.
How do I make this election within the program?
To report a Qualified Joint Venture within the program, please follow the steps below:
- Federal Section
- Income
- Profit or Loss from Business (Edit Schedule C)
- Questions About the Operation of your Business.
- Check here for Qualified Joint Venture. (Ownership between Taxpayer and Spouse must be 50/50.