It's my understanding that "each spouse's interest in the business" is determined by our own partnership agreement, i.e., whatever we want it to be. Can our agreement not change? I would assume that it is treated just as any partnership agreement and can be changed by agreement of both parties.
Pub 541 Partnerships:
Partnership Agreement
The partnership agreement includes the original agreement and any modifications. The modifications must be agreed to by all partners or adopted in any other manner provided by the partnership agreement. The agreement or modifications can be oral or written. Partners can modify the partnership agreement for a particular tax year after the close of the year but not later than the date for filing the partnership return for that year. This filing date doesn't include any extension of time.
If the partnership agreement or any modification is silent on any matter, the provisions of
local law are treated as part of the agreement.
It doesn't really create a tax advantage. The only difference is how the SE earnings are reported.
