Partners can agree among themselves as to how income, losses, and gains will be divided among the partners. For instance, you can claim 100% of the losses and your partner can claim 100% of the income. Any agreement is possible. If there is no partnership agreement, then income, losses and gains are allocated proportionally based on the partnership interests of each partner. The partners then report the allocated amount on their individual income tax returns and pay taxes accordingly. It's best to talk to an accountant or attorney to set something like this up. Hope this is helpful.
