Joint Checking Account / Joint Ownership??

Question

If i have a joint ownership of a rental property and the income from the property goes to a checking account that is joint ownership. Are taxes at the end of year only go to the primary SSN or both?

Wondering how we split the interest received from the account as well as the income that in generated from the company when we file taxes. Thanks!!

I live in CA.

Answer 1

Did you actually start a company with no idea how profits and costs were going to be apportioned??? You need a lot more help than you will get on here:

If you did not start a company, did you even form an L.L.P. (Limited Liability Partnership)? To whom are the rents paid? Unless there are documents to the contrary, the income is usually considered to have been evenly split.

My suggestion is that you form a real estate holding company and sell the building to that, after consulting with an attorney dealing with matters such as this in CA. There have already been major mistakes made in not having anything written down about income sharing.

After the company is formed, you will work for it and be paid by it, even if only occasionally.

Answer 2

I believe the interest on the account would be reported under the primary name and social security number. You can double check with your bank but that's how we do it.
If you put the account in the company's name it would be reported for the business and it's tax id.
For splitting the income you might want to check with a tax accountant. The thing I'm seeing that's missing is returns for the company. Then you get money from the company. There is tax question on Yahoo but I think you're better off to ask a professional to get to off on the right foot.

Answer 3

If the property is jointly owned, the income and tax burden is normally shared. It does not matter where the rent checks are deposited; in fact whether or not they're deposited has no impact on the taxes at all.

If you share the income and tax burden, include a statement with both tax returns explaining how you split things and who the other taxpayer is, i.e. name and SSN.

Answer 4

Do not do this!!! I know it seems like a good idea and you want to be there for your friend, but it is a huge risk to you, with no chance of reward. If you co-sign on this account and put any money into it, your friend has the right to spend or withdraw it and there is nothing you can do to legally get any of your money back. Even if you never put a dollar into the shared account, it can have huge consequences for you. If she starts writing bad checks, or is overdrawn, you would also be in serious trouble and it could ruin your credit. If she wrote enough bad checks, you could be in legal trouble as well because your name is on the account too.

Answer 5

You file your taxes a "Married filing jointly", right? Then it makes no difference. If you are "married filing separately" then you need to seek the advice of a good tax accountant because you are most likely paying far too much in taxes to the IRS.

Answer 6

Call a local tax office in your area, like H&R Block