If you want to deviate from this, you need to terminate the venture and begin a new one with a new agreement.
Um, ok... We just came to a new oral agreement. What would terminating the venture look like? We elected to treat this as a QJV by filing two Form Fs our first year of business, as per IRS rules. There was no agreement or notification sent to the IRS. Our agreement is not annotated anywhere besides the fact that our income and deductions were split 50/50 on the first return and a number of subsequent returns.
The split between husband and wife is based on ownership. There are no special allocations allowed.
Citation? I guess we'd have to define "interest in the business". I would think there would be other considerations in such an agreement besides monetary investment and ownership, e.g., division of labor. Wouldn't a person doing a greater proportion of the work expect a larger income allocation? Wouldn't such an agreement be expected to change over time if division of labor changes?
